Legal Question in Credit and Debt Law in North Carolina

Unfortunately, its impossible to answer here as this question requires a full analysis of your assets and liabilities to determine what you need to do. You should consult with a bankruptcy or debt collection defense attorney to determine what your options are.

I agree with Attorney Love. You do not relay enough facts for an assessment. Generally what will happen is this.

Assuming that you do not file bankruptcy, then the lender is going to sell the car (if not already done) and will then try to collect the balance owed on the car (called a deficiency - deficiency = amount remaining on the car loan + collection/repo/sale costs - proceeds received at auction sale). The deficiency balance may get sent out for collection. The lender has 3 years to sue you from the date of the sale roughly.

Note, you can file bankruptcy at any time - if you have more than $10,000 in dischargeable debts (including this debt) it may make sense but this is a matter which is beyond the scope of this post.

If you do nothing, the lender may eventually sue you and recover a judgment. You do not indicate who is liable on the car note - is it just you or you and your spouse? Makes a difference.

Assuming just you, then the lender can try to collect but to do that, the lender must first serve you with papers called a notice of rights to get exemptions designated and motion to claim exempt property. Do not ignore these papers! Depending on what you own, you can exempt up to $5,000 of personal property, $3500 equity in any car and possibly $5,000 in a wildcard and no more than $30,000 equity in any real property. If the judgment is against you and your spouse then you each get to exempt this much. There are some other exemptions as well which may or may not apply to you depending on your situation.

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