Are They Less Likely to Repo a Car With High Milelage & Underwater Loan?

[Dan76]

I don't know if this has any influence on a finance company taking a car back or not, but will they hold off as long as possible on taking a car back if it's not worth it? I mean if the car is in really bad condition, has an upside down loan and extremely high miles.

I'm asking because after I filed BK 7, Toyota Financial sent me a letter informing me they would not be sending statements anymore. They would only accept reaffirmation, redemption or surrender of the vehicle. I'm not reaffirming the car and I can't get a redemption loan. The car has 142,000 miles on it and the book value is about 3-4K, but I still owe about 9K on it.

My lawyer told me they probably would not take the car back if I kept on paying it. He said that Toyota does not repo cars as long as you keep paying. He said certain companies like Ford will always take the car, but he's never heard of Toyota being really aggressive about it. I have been paying, but I'm always a month behind.

What do you think? If I keep paying but always a month behind, will they attempt to take it? I did include it in the petition, so I can walk away at anytime now and not be held liable for the 9K I still owe. I would like to keep it.

[SMinGA2]

If you're 'always a month behind' then there is a good chance you'll wake up one morning and find the car gone. Or leave work one day and not have a ride home. It doesn't really matter that the car has high mileage and such. Taking the car, and selling it for something at auction, is a way for the lender to recoup some of what they loaned AND be done with the loan.

[Dan76]

Yes, I know. What I really mean is, will a finance company ever choose to not go through with a repo, because they will actually be losing money and not recouping any money, or too little amount to bother with. You have to factor in repo costs, storage costs and auction costs. Also, the car is depreciating in value everyday due to extreme high miles. Anything over 100K is very hard to sell and depreciates faster than under 100K. I going to eventually try and catch up with the loan, I'm just waiting for some money coming my way soon.

[DesdemonaB]

Hi Dan

They will most likely repo if you do not catch up - but they can not touch the car till after your discharge or if they are awarded a stay of relief either way you will know if the vehicle is in danger of repossession.

The finance company does not know how many miles are the vehicle - they are only aware of mileage at the beginning of the contract nor do they know the physical condition of vehicle untill it comes to the repo man and/or auction.

Good Luck with everything.

[ValleYum]

I read in another thread here that technically a lender can repossess the car 45 days after the 341 if it has not been reaffirmed, redeemed or surrendered (most do not repo if the payments are current but Ford Motor Credit is known for repo-ing if you don't reaffirm or redeem). They can file for a relief from stay even sooner if they wish.

[Dan76]

either way you will know if the vehicle is in danger of repossession.

So does that mean they would notify me if they intend to repo the car? Would they give me a chance to catch up on the loan? I'm assuming that since I'm not reaffirming, and they are not sending statements anymore, they will just take it without warning.

[DesdemonaB]

So does that mean they would notify me if they intend to repo the car? Would they give me a chance to catch up on the loan? I'm assuming that since I'm not reaffirming, and they are not sending statements anymore, they will just take it without warning.

Hi Dan

Sorry I wasn't clear - If the FC petitions for a stay of relief you will get notification you will also know if it was granted, meaning they can come for the car before the discharge date. If they do not petition for a SoR they must wait till after the discharge to attempt to get the car; so if you receive your discharge and have not caught up on your payments they will come and get the car.

As for not sending statements - doesn't matter you know the payment address and due date there is nothing stoping you from making a payment.

Yes they will most likely take with it without notice, maybe if your lucky and are at home they will allow you to empty the car before they take it.

[Dan76]

OK thanks, I guess I better try and get caught up before the discharge!

[footballfan]

I read in another thread here that technically a lender can repossess the car 45 days after the 341 if it has not been reaffirmed, redeemed or surrendered (most do not repo if the payments are current but Ford Motor Credit is known for repo-ing if you don't reaffirm or redeem). They can file for a relief from stay even sooner if they wish.

This happened to us. We had not yet been discharged although it had been more than 60 days since our 341. Car company sent a two truck to pick it up.

Our car had about 108,000+ miles on it and finance company did not want to play ball with us. No advance notice, but tow truck driver was very nice and knocked to let us know he was there as he saw some things in the car still.

[Dan76]

This happened to us. We had not yet been discharged although it had been more than 60 days since our 341. Car company sent a two truck to pick it up.

Our car had about 108,000+ miles on it and finance company did not want to play ball with us. No advance notice, but tow truck driver was very nice and knocked to let us know he was there as he saw some things in the car still.

Were you current on payments? What finance company was it?

[footballfan]

Not current Dan -- we contemplated getting current prior to discharge but with the high mileage and amount still owed, figured we'd really start fresh.

I only wanted to point out the surprise of having our car repo'd prior to discharge -- we truly believed we would have until discharge to use the vehicle and never knew they could come take it as early as 45 days after the 341 (although when they repo'd it was more than 60 days from the 341, but we hadn't been officially discharged at that point). Again, we were behind in payments.

It may be worthwhile, if you are serious about keeping it, to get caught up on your payments before you hit that 45 day post-341 mark. YMMV, but better safe than sorry.

And we were with Cap One.