Legal Question in Credit and Debt Law in California

Re: lean on house/auto repo

The automobile finance company cannot immediately (meaning, as soon as you surrender the car) put a lien on your home. They can, however, place a lien on all of your property after they sue you and obtain a judgment against you. The process generally goes something like this - upon repossession of the car (voluntary or not), the lender will wholesale auction your car. They will recover a very small portion of what the true fair market value of the car is, so unless your loan is very small compared to value, you will almost certainly end up owing them a "deficiency." The deficiency is the difference between what you owe plus costs of repossession and sale, and what they recover at wholesale auction. They will then demand that you pay that amount, and when you do not, they will file suit and obtain a judgment against you for the deficiency, the costs of repossession and sale, and now attorneys fees and costs for the lawsuit. They can then file an abstract of judgment against you in the County Recorder's office, and that abstract attaches to all property you own in that county. This assumes it is a loan, not a lease. If its a lease, you will owe the balance of the lease plus repossession costs, attorneys fees and costs with no credit for a wholesale auction of the car.

My advice to you is try to settle the outstanding debt with them as soon as you turn in the car, or at the earliest point at which they will discuss settlement with you. You can see that the longer this drags out, the more you will owe them, and the more difficult they will make your life.

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