Legal Question in Credit and Debt Law in Georgia

You are required to pay the deficiency owed on the car. The deficiency is equal to the loan balance remaining on the car at the time of default, plus collection/repossession and sale costs, minus the sale proceeds generally. There may be interest on the amount owed too.

If the debt was sold to a junk debt buyer, then presumably the debt buyer or any debt collection agency they hired has contacted you in writing. I would demand verification of the debt, including the name of the original creditor, original account number, proof of ownership of the debt and manner of calculating the purported balance owed.

Send the request via certified mail, return receipt requested and keep a copy of the letter for you. See if you get a response. If you do, review. If you have the funds to offer a reasonable lump sum settlement, then do that. If you don't have the funds, save up until you do. Never make a payment plan now - they are going to want the full amount.

Since the car was repossessed, you obviously could not pay. Why was that? You don't need to answer me, but you need to think about it as you may be able to use the answer in negotiating a lower settlement. Job loss, paycut/reduction in job hours or medical reasons are all good reasons to get a lower settlement.

Junk debt buyers buy debts for pennies on the dollar so they are still making a profit if you agree to pay something less than 100%. And the bigger your debt the bigger your saviings can be - example - its easier sometimes to settle a $20,000 for 25% (or $5,000) than it is to settle a $2000 debt.

If you need help disputing or resolving the debt in a non-bankruptcy non-litigation context, please contact me at [email protected].