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  1. #1
    Join Date
    Nov 2009
    Posts
    1

    Default Repossession of One of Two Vehicles With the Same Lender

    My question involves an auto loan or repossession in the State of: Arizona

    I had 2 vehicles financed with a Federal Credit Union in Arizona. I was unable to continue paying on 1 vehicle so I voluntarily surrendered the vehicle back to the lender. The vehicle was auctioned and I now have a 22K deficiency with the lender for the difference in the loan and what it was auctioned for. They are telling me I have 2 options:

    1) Take on a signature loan for the deficiency (22K) at the same interest rate I had on the vehicle (6.5%) for 60 months. This makes my monthly payment over 1/2 of what it was before and I can't afford that.

    2) They will send the deficiency to a collection agency. In addition, even though the 2nd vehicle I have financed through them is current and I can afford to and have been continuing to make that payment, they said they will repossess that vehicle also. I advised them that the 2nd vehicle is also worth far less than it could be sold/auctioned for. They said it is their policy and the additional deficiency on the 2nd vehicle would also be written off and sent for collections.

    I could see if the 2nd vehicle had equity this could possibly make sense, but with the 2nd vehicle having negative equity, I don't see how they can do this?

    Looking for some help as to if this is possible and legal? If so, how often does it actually happen as opposed to just a threat to get me to take on a signature loan for the defiency?

    Thanks in advance
    MtnDewDewd

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Repossession of One of Two Vehicles With the Same Lender

    They can do whatever your contract with them permits. If it permits them to repossess any and all vehicles financed through them if you default on one vehicle, they can do exactly that.

    You have other options - such as consulting a bankruptcy lawyer, discharging the debt on the first vehicle, and perhaps also cramming down the debt on the second to the market value of the vehicle.

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