If I have to give up my car because I can’t afford it and I also signed a document regarding collateralfor the loan, do I have to give up the collateral also?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If I have to give up my car because I can’t afford it and I also signed a document regarding collateralfor the loan, do I have to give up the collateral also?
Asked on February 5, 2012 under Bankruptcy Law, South Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
From what you write, it appears you provided additional colleral, above and beyond the car itself. If that is the case, then the answer to your question depends on the remaining value of the loan vs. the value of the car. When the car is repossessed, it will be sold; the proceeds of the sale, less certain administrative expenses and expenses of collection, will be applied against what you owe on the loan. If the proceeds of the sale pay off the remaining balance of the loan, the lender will not have recourse to the colleral--it's debt was satisfied. But if there is still a remaining balance after the car is sold, the lender can look to your colleral to pay off the balance.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.