US Legal Forms
Legal Resources
Questions & Answers
Contracts
Am I responsible for the loan balance after a truck repossession?

Am I responsible for the loan balance after a truck repossession?

Q: What happens if I voluntarily surrender my financed car?

Voluntarily surrendering your financed car means you are returning it to the lender. While this may prevent repossession, you will still be responsible for any outstanding loan balance after the vehicle is sold. This can also negatively affect your credit score.

Q: What happens if you don't want your financed car anymore?

If you no longer want your financed car, you can consider options like selling it privately or trading it in. However, returning it to the lender or surrendering it will still leave you liable for any remaining loan balance after the sale.

Q: Does returning a financed car hurt your credit?

Yes, returning a financed car can hurt your credit score. It may be reported as a negative event, especially if the loan balance remains unpaid after the vehicle is sold. This can impact your ability to secure future credit.

Q: What happens if you let a financed car go back?

Letting a financed car go back, whether through repossession or voluntary surrender, means you will still owe the difference between the loan balance and the sale price of the vehicle. You may also incur additional fees, and your credit score could be negatively affected.

Full question:

If I let a truck go back, will I be responsible for the difference between what I owe the finance company, and what they get for the truck? It seems that I should be judgement proof as I own no property or anything of any value.

Category: Contracts
Subcategory: Breach of Contract
Date: 04/07/2025
State: Texas

Answer:

When a truck is repossessed due to defaulting on an auto loan, you still owe the remaining balance on the loan. The lender has the right to repossess the vehicle without prior notice if you default. After repossession, the lender will sell the truck to recover the amount owed. If the sale price is less than your outstanding loan balance, you may be responsible for paying the difference, along with any repossession costs incurred by the lender.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the penalty for returning a financed car?

If you return a financed car, you may face penalties such as negative impacts on your credit score and potential fees for early termination of the loan. Additionally, you will still owe any remaining balance on the loan after the car is sold, which can lead to further financial obligations.