Is a creditor required to release their security interest in a car if it decides on a money judgement versus a repossession?

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Is a creditor required to release their security interest in a car if it decides on a money judgement versus a repossession?

Asked on April 28, 2011 under Bankruptcy Law, Wisconsin

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

In really thinking about this question it appears that you are indicating that the lien holder has opted for a judgement against you rather than repossession of the vehicle, which is not usually the case.  So it makes me wonder just how far behind you are in your payments because Courts do not allow a judgement for "future payments" on installment contracts, which is generally what you have here.  What does the loan agreement say the remedies are for the lien holder?  It would not seem fair or equitable to allow a money judgement AND to allow them to maintain a security interest.  Please have someone read your paperwork and advise.  Good luck.


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