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texas11 · Dec 2, 2007, 08:25 AM

I missed 2 payments on my car loan and avoided calls from the lender because I knew I would pay them soon, when I received a long awaited check-in-the-mail. I got that check on Thursday and went online to make payments yesterday, Saturday, and was told that my "account had been closed". I then opened a letter I received that week from them saying that I was "in default" on the loan. I honestly didn't even realize I was 2 months behind, and could have even paid them at the time, although it would have made my finances very tight.. . just wasn't aware of the severity of the situation.

What happens now? I'm guessing that even though I offer to make payments now, my previous loan is void. Any thoughts on what my options are at this point? Do I need to find another lender for the remaining balance? Do I even have this option?

I need some advice before calling them Monday morning.

Thanks.

Nik

s_cianci · Dec 2, 2007, 08:35 AM

Contact your lender and inform them that you're now prepared to make the payments to bring your account current. It's surprising that they defaulted your loan after only 2 missed payments (unless you've had a previous habit of late/skipped payments with them ; then that's a different story.)

texas11 · Dec 2, 2007, 10:32 AM

I do have a history of making late payments, but have never skipped a payment before. I guess I go through mail less often and end up making double payments sometimes to catch up. Never thought I would be in the position of default for this.

ScottGem · Dec 2, 2007, 10:59 AM

Originally Posted by texas11

I missed 2 payments on my car loan and avoided calls from the lender because I knew I would pay them soon, ...just wasn't aware of the severity of the situation.

What happens now?

First, this is something I learned when I was doing collection work and something I always advise debtors. NEVER ignore the creditor. Always keep the creditor informed. Had you kept those lines of communication open you would have known the severity.

So what happens now? I'm surprised the car hasn't been repossessed yet. That's probably the next step the lender will take. The only thing I can think of that will forestall that is for you to pay off the full balance of the loan. Otherwise they will repossess, sell it at auction then go after you for the balance that was not covered by the auction price.

texas11 · Dec 2, 2007, 09:42 PM

If I have to pay the full balance to keep the car, what is the chance that another bank will give me a car loan for the remainder of the amount given the situation I am in?

texas11 · Dec 3, 2007, 07:19 AM

Okay. So I called the creditor at 7am this morning and they said they do not allow online payments on accounts more than 45 days past due. Still not sure why the online screen said the "account was closed"? That really scared me.

I made the two payments due over the phone to bring the account current and that was that. Person on the phone did not mention anything about repossession or default. I was so happy to learn that my account hadn't been closed and they were not coming for my car, that I forgot to ask if the "defaut" note will show up on my credit report. Technically I was in default, so I guess that is likely. Is there anything else I should do at this point to better my credit rating beause of this?

Thanks so much for the advice over the weekend! I have learned my lesson and will be much more aware of the payment due dates.

Scared Straight in Texas.

Nik

excon · Dec 3, 2007, 07:25 AM

Hello texas:

Scared straight?? Nahhhh. You're going to have to do some WALKING before I believe that.

I think they're STILL going to repossess your car - which they have every right to do.

excon

texas11 · Dec 3, 2007, 07:49 AM

I called them again and a "default" mark WILL appear on my credit report.

excon · Dec 3, 2007, 08:28 AM

Hello again, tex:

It's my experience that these scumbags lie through their teeth. I'm glad you trust 'em, though.

excon

ScottGem · Dec 3, 2007, 09:48 AM

As I said I was surprised that they hadn't repo-ed the car already since declaring the loan in default, so what you are saying makes more sense. Keep your payments up to date and that will help mitigate the black marks on your credit.

texas11 · Dec 3, 2007, 12:06 PM

I only owe about 7K on this 30K car and it is just over 2 years old with low mileage, so the thought of them being able to repossess it is so scary. At auction the car would get well over 7K, wouldn't it? In that case would they have to pay me back the difference? How can they take an asset that I have paid 23K toward without giving me something back?

Just wondering.

Nik

excon · Dec 3, 2007, 12:20 PM

Hello again, tex:

I don't know what it's worth. What you owe and what you bought it for doesn't tell me a thing. Look it up in the Kelly Blue Book. Deduct repossession costs, legal fees, bank costs, auction fees, unpaid interest and any other fee they can think of.

If there's anything left after that, yes they should send you the difference. Of course, they might sell it to their buddy for well below market rates and charge you the difference.

What? They shouldn't do that? No, but this ISN'T a reputable bank. Nahhh. This is one of those slimey lenders, isn't it?

See, the good news for THEM, is that they don't have to BILL you for ANY of these charges. They're built into your car, and all they have to do is send you any money that's left over after they've had their fun... Sorry, Dude. I'll bet there'll be NONE left.

Of course, if you trust 'em, they'll send you a BIG check. Right... Bwa, ha ha ha.

excon