Legal Question in Credit and Debt Law in North Carolina

Re: Voluntary repossession on a vehicle

Your creditor says they want a lump sum payment for the deficiency. The creditor is allowed to ask for this under your contract. This route is the way to go for the least amount of damage to your credit rating.

Once the deficiency goes a certain number of days past due and unpaid, it will be marked for collection and sent to either a different department of the creditor or to a collection agency. At that point, your credit report will show a collection, but it is often possible to work out a payment arrangement over time. The creditor is still not obligated to accept any payments made over time once you default on the original note.

If your creditor decides to file a lawsuit to get a judgment for the deficiency amount and is successful, you will be able to pay the clerk directly if the creditor does not want to accept your payments.

I would recommend you see a professional consumer credit counseling agency in your area such as Family Service of the Piedmont in order to get more comprehensive advice about your financial situation.