WHEN I TOOK MY CAR BACK TO THE DEALER FOR A REPO I WAS ASKED TO SIGN SOME PAPERS. WHATS THAT FOR?

Question

I GOT A NEW 07' JEEP COMMANDER IN JULY OF 07'. MY MONTHLY PAYMENTS ARE AT $665.00 PLUS INSURANCE AND GAS, AND NOW 11 PAYMENTS LATER, I JUST CANT AFFORD THIS PAYMENT. I REALLY DON'T WANT TO HURT MY CREDIT, BUT I FEEL I HAVE NO OTHER CHOICE. I HAVE TRY'ED TO TRADE IT IN FOR SOMETHING SMALLER N CHEAPER BUT I STILL OWE 31K AND KBB PRICED MY JEEP AT ABOUT 15K. MY CREDIT IS STILL YOUNG (I'M ONLY 20YRS OLD) I HAVE NO CO-SIGNER. SO I LEAVE THE DEALERSHIPS EMPTY HANDED. WHAT IS LEFT FOR ME TO DO? I TR YD TO TAKE IT BACK TO THE DEALER BUT THEY WANTED ME TO SIGN SOME PAPERS, I WASN'T SURE WHAT THE PAPERS READ, I REALLY DON'T NOW WHAT DO. CAN SOME PLS HELP ME OUT WITH SOME ADVICE. THANK YOU.

Answer 1

>>  I TR YD TO TAKE IT BACK TO THE DEALER BUT THEY WANTED ME TO SIGN SOME PAPERS, I WASN'T SURE WHAT THE PAPERS READ,

They will probably try to make you responsible for rest of the payment EVEN after your return your car.  The only way to know for sure is to read the contract (or get a copy and study it at home).

Good Luck...

Answer 2

A repo is the worst case.  When a car is reposessed, the bank will sell it at auction.  They willd educt whatever they get at auction from the balance of yoru loan.  You are still responsible for the remainder.

So, if you owe $31K, and it sells at auction for $15k - you will still owe the bank $16,000.  They will also charge you a reposession fee, tow fee, storage, and auction fees.  

They will be able to seek a judgement against you, and have collectors calling you day and night for their money.  If they go to court and request it, they can also be awarded a garnishment - so they can attach your wages until the balance is satisfied.

The repo will be on your credit for a *minimum* of seven years.  But it can actually be on there almost indefinietely.  Banks 'sell' their bad debt to collection agencies.  Every time a new collection agency gets involved, the seven-year clock gets reset.  And that is 7 years "after the last action".  What this means is, should you make a payment on the debt in July of 2011 - the 7 yr clock starts there and will be on til June 2018.

You will not be able to get a favorable interest rate on anything for a very long time.  Any credit cards you have will adjust to the maximum rate in their agreement.

Getting a repo is the absolute worst thing you can do.  I know times are tough - they are for everyone.  But you have to tighten the belt and figure out a way to prevent this happening.  Stop buying coffee, eat at home instead of eating out, no more movie nights and fast-food lunches.  If you try hard, you cna find many ways to shave the budget and protect your credit.

As to 'what the papers said' - READ them.  every word.  don't sign anything until you have.  If you still dont understand them, take a copy and have someone you trust review them and explain it.  Or, talk to a lawyer.  For a $50 fee they can read over everything and explain it as well.

But I stress that a repo is absolutley the worst option.