Car Repossessions have been one of the more consistent and common debt matters that we have encountered in the last decade. Now we are starting to see repossessions accelerate due to the difficult economy and the debt related to repossessions rise significantly. Toyota Motor Credit Corporation and Ford Motor Credit Company are two of the more common banks that we sue pursuing consumers for repossession debt. If a consumer stops making payments on a lease or finance, a bank such as Toyota or Ford will immediately move to repossess the vehicle. Once they do so they will eventually sell the car at auction. The cars usually sell for a fraction of their worth at auction and the banks then will go back after the consumer to collect the deficiency balance. The deficiency balance is the difference between what is owed on the car and what it is sold for at auction. Repossessions are particularly concerning when it comes to debt because of the additional fees added to the total before the car is sold at auction. Fees such as towing, and storage of the repossessed car can significantly increase the deficiency balance that the banks such as Toyota and Ford collect on after the sale of the car. A common misconception among consumers is that a voluntary return of their car when they cannot afford it is not seen as a repossession. In fact, a voluntary return is exactly the same legally, as a repossession. Toyota, Ford and other banks will pursue a consumer who returns their car for the deficiency in the same exact ways that they would for a regular repossession.
Toyota and Ford frequently retain Rubin and Rothman, a debt collection law firm to attempt to recover the debt via collection, to sue consumers and to enforce on judgments obtained against consumers. Rubin and Rothman will usually file a lawsuit on behalf of Toyota and Ford quickly to recover the deficiency. An answer must be submitted to avoid a default judgment which are all too common in the consumer debt field. Submitting an answer keeps the burden on the banks to prove their case. It also gives some leverage to the consumer if they are interested in negotiating a settlement to reduce the balance. If a default judgment is obtained, then it is important to file an Order To Shoe Cause to vacate the default as quickly as possible after knowledge of the judgment as there is only a one year period to do so. Vacating the judgment re-opens the case so that the consumer can defend themselves on the merits.
We have been successful in negotiating fair settlements with Rubin and Rothman for both Toyota and Ford Motor matters saving consumers a large percentage off of the debt and obtaining interest free repayment plans. We have commonly been able to obtain settlements reducing the balances of Toyota and Ford by 50% and placing consumers on interest free payment plans over 12-18 months saving them further interest fees that would have accrued. When a repossession occurs, it is important to be aggressive in protecting your rights and to use legal leverage to resolve the collection matter in the most favorable way possible.