What will my lender do legally if my car is totaled.

UPDATED: Sep 30, 2022

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What will my lender do legally if my car is totaled.

I am in the military and I left my car with one of my friends and told him not to drive it. He did it anyway fell asleep at the wheel and totaled my car. My car is financed and my insurance which is a liability will not cover the damages. What should I do? As far as will the bank make me pay all the money owed or do I just continue to make payments

Asked on July 20, 2017 under Accident Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

As a general matter, your obligation is to continue to pay the financing as agreed, so as long as you continue to make the regular payments, the bank should have no cause to complain or take action. Generally, it would only be if you default (fail to make payments when due) that they could take legal or collections action. That said, the financing or loan agreements you signed are a contract; as with any other contract, it's specific terms are important. Review this agreement to see what, if anything, it says about the situation of a car being totalled.

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