Can they repossess my new car after a previous repossession two years ago?

Question

I had bought a car in 2005 and had it voluntarily repossessed in 2006 after a divorce and no job. I heard through the grape-vine that if i didn't settle the old account that if i bought another vehicle it's possible they can repossess my new car to settle the debt on my credit at any time. Is this true? Rhode Island, resident.

Answer 1

Not at all true. You had a contract to repay loaned money for the first car (a loan) which stated that if you pay all their money back with interest, the creditor will give you clear title to your car. By not keeping up your end of the deal, they have a right to repossess the car, and sue you for the unpaid balance after they sell it. If they don't get their money, they can file a lien against you, which in all likelihood will mean you can't purchase real property (land) for a period of time.

They have no right to any other possession you own, including money or any subsequently purchased car. Your current car doesn't even belong to you (until you repay the loan), so "the grapevine" is suggesting the first lender could take property belonging to the second lender to satisfy your debt.

Good idea on paying cash from now on - let compound interest work for you, instead of against you!

Answer 2

No! I,ve had several Voluntary repos' and they have nothing to do with your past other than causing you most likely higher intrest rate , How can a previous bank come take a vehicle another bank owns? It would have to be done in court then only if  you did own the vehicle not the bank, It appears you may have a loan on your current vehicle? either way under the circumstances you've stated that is not true, those loans are now on your credit report as charge off etc.but collection agencies can still harass you as they do me but I just bought a new vehicle high apr but can't no past bank come take it ,It is not mine

Answer 3

Laws vary from state to state. Your best bet is to talk to the Rhode Island Bar Association and ask to speak to an attorney who specializes in laws dealing with personal finances and bankruptcy issues.

Answer 4

This is a general answer; Rhode Island law may be different.  When you did your voluntary repo, you probably did not extinguish the old debt.  It is possible that you also signed a confession of judgment.  That is a document that has the same effect as if you were sued by the first bank and they won a judgment against you.  If you did not sign a confession of judgment, the bank may or may not be able to sue you now--it depends on how old the debt was, when your last payment was, and the statute of limitations (10 years on a contract in my state--Louisiana.)

Once a creditor has a judgment, they can execute on it.  This can be done by garnishing your wages, or in some places, by seizing property you own.  This could include automobiles, unless they are specifically exempted by state law.  Whether or not they would choose to do so depends on several factors--which can be boiled down to the question of whether they can net enough money from seizing and selling the car to make it worth their time and trouble.

Your best bet (and the morally correct thing to do) is to pay off the debt.  

Hope this helps.

Answer 5

No, that is absolutely not true!

You will keep your current car as long as you pay for it.

However, the previous creditor can file a judgement against your social security number which will haunt you for as long as they pursue it or until the state mandated statute of limitations runs out.

Answer 6

They can't repossess your new car if they don't own it.

Answer 7

Who's they? Surely you didn't borrow money again from the same bank.