Legal Question in Credit and Debt Law in Texas
auto repossession
Hello,
We had purchased a 2 year old car in June of 2001. Shortly after 9/11 my husband became laid off. The car payments were behind and we had requested extensions for two months which the company did. However the payment for the third month had not yet been paid. They did inform us that the car was being sold at auction and gave us all the details. The real problem is that the auction left us with a $6,000.00 balance. How can we have to pay when we no longer have the car and we are not the ones who decided to sell it at a loss? Should we respond to the letter that gives us 30 days to dispute the debt or leave it unchallenged? What is the likely outcome? Does this usually result in forced collection through payroll? What is the best option for us we have a very limited income.
Marie
2 Answers from Attorneys
Re: auto repossession
First, your wages cannot be garnished in Texas.
The $6,000 is now an unsecured deficiency. It is most likely a valid debt.
You may want to consult with any attorney about your options, including, the possibility of filing bankruptcy.
Re: auto repossession
The question of the sale is whether or not it was commercially reasonable. If it was, even if the vehicle sold at a loss, you are still responsible for the unpaid balance. Wages cannot be garnisheed in Texas for debts such as this. If you try and fight it, you will probably lose, and run up additional attorney fees and court costs on top of the debt.
Explain the situation to the creditor and see what you might be able to work out. Or look up the phone number for the Consumer Credit Counselling Service nearest you. They are a non-profit group that can help you reduce your outstanding debt and pay off your creditors.
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