Legal Question in Credit and Debt Law in California
economics student wondering about a credit scenario
I am learning about credit and I am wondering about this credit scenario: I have paid about half of what I owe the creditors for this car. I was unable to pay my debts after that. They reposess my car. However the resale value of the car makes up for way more than I owe. When they do resell my car, I obviously don't get a cent from the resale right? Also, they obviously get to keep the money that I paid them up to the point of repossesion, right? Can someone give me some more insight into this because it seems a little unfair.
2 Answers from Attorneys
Re: economics student wondering about a credit scenario
The answer would depend on your contract, but typically the sale value is credited to your balance. Added to your balance are the costs of repossession and legal fees, if any. Cars usually are worth less than the amount owed, or very close, and the cars are sold at wholesale auctions, so few people receive a refund.
Re: economics student wondering about a credit scenario
Thank you for your inquiry.
The laws and other rules for secured debt are the same whether it's a house, or a car, or furniture. The creditor is entitled to apply the proceeds from sale to their account, and is entitled to get any costs of repossession or sale. Any proceeds above those costs and their account have to be returned to the buyer.
I hope that this information helps, but if you have further questions you need answered, want more information, or feel that you need legal representation, please feel free to email me directly at [email protected]. I�m happy to help in any way that I can.
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