Legal Question in Credit and Debt Law in North Carolina

If the house is in Ohio, where are you? I cannot advise you on OH exemptions. Letting a car get repossessed is a bad idea. Even if you surrender it voluntarily, the car will be sold at auto auction . You will still be liable for the balance. Depending on where you live or where the loan contract was made, the creditor has 3 or more years to sue for the deficiency balance. Cars bring in pennies at auto auction so there is going to be a deficiency balance.

If a judgment is entered, then a creditor will be entitled to execute on it. If you are in NC, you will be served with a notice of rights to have exemptions designated and motion to claim exempt property. I suggest that you see me or another NC attorney to help you fill them out. Any Ohio property would not be at risk of an NC judgment unless the creditor found out about the Ohio land and transferred the NC judgment to Ohio.

If you are not upside down, I would try to sell the car for what is owed and get the lender and the buyer involved so that title can be transferred to the buyer or the new lender for the buyer. If you are upside down and really can no longer afford, then you have no option but to surrender the car. How much will a deficiency be? Take a wait and see approach. If you are sued and you have at least $10,000 in dischargeable debts, then you may want to file bankruptcy. Or maybe your circumstances will have improved enough so that you can make a reasonable settlement. Of course, you will have a repo on your credit. It means it will be hard for you to get another car loan at a favorable rate. Do not pay exhorbitant rates for a car. Buy your next car in cash for whatever you can afford.

In order to attempt to reach your real estate in Ohio, the creditor would have to file a lawsuit against you and get a civil judgment for the amount of the deficiency (difference between the amount you owe on the car plus expenses of sale, and the amount it sold for after you surrender it). Then, they would have to get the judgment recognized in Ohio. This is something your lender might or might not take the time to do. You would need to talk to an Ohio licensed attorney to see how much of the house might or might not be protected from creditors. Generally, if there is a mortgage on the real estate in Ohio, the judgment lien cannot jump ahead of it, and you would not lose the property in Ohio so long as there is still a significant amount owed on the mortgage. But, not being licensed in Ohio, I can't tell you specifically what could happen.

You should have a consultation with a qualified consumer bankruptcy attorney if you cannot afford to pay all of your debts. He or she can explain all available options, not just bankruptcy. Bankruptcy may or may not be the right thing for you to do now.