Legal Question in Credit and Debt Law in North Carolina

Yes and no. Please try and avoid having a repo. It would be much better if you could sell your car to a third party for at least what is owed on it, but this depends on what is owed and what the car is worth. If you are upside down, you still do not want to give it back. You do need something to drive and you should plan on driving this car until the wheels fall off - literally. However, if you have to let the car go, then your option in that case might be a bankruptcy.

Understand that if your car is just repossessed, they sell it at an auto auction which does not bring in anywhere near what the car is worth. Repo costs will be added to what you owe. The sale proceeds will be deducted, but as I said, the proceeds are usually not that much. The lender will come after you for the balance. Usually, they try to collect and ay send it out for collection. Eventually, they will sue. You do not have to do bankruptcy today. You can wait until the company sues you. And you might be in a better position in a year down the road than you are today and you could always try to settle at that time.

In a worst case scenario, the lender will get a judgment against you. There is no wage garnishment in NC. You can exempt certain property from execution, but you have to take steps to affirmatively protect your rights by filling out exemption papers which the lender will have the sheriff deliver to you after e tery of the judgment. The lender does really want your pots and pans - what they are after is things they can sell and convert to cash - land, another car or something (plane, boat, RV etc.), your bank account, electronic goods (tv, computer, DVD etc.).

And yes, the judgment does become a lien on your real property. I don't know what you have, its value or whether it is owned by another person. Depending on the value and if it is encumbered or owned along with someone else, the lender may not force you to sell. But if the properrty is sold, the judgment is a lien and would have to be satisfied from the equity remaining after the mortgage is paid.

Judgments are good for 10 years and can be renewed for another 10 years. They earn interest at a rate of 8% per year and will only get bigger.

You might want to just talk with a bankruptcy attorney in your area. Many attorneys give free consults. That way, you will know how things stand and can decide whether to let the car go, keep it or file now or later.