How to keep the car when an auto loan is charged off

Submitted by justin.oscar on Wed, 06/03/2009 - 07:48
Forums
Credit repair

Your car loan is charged off when you have been delinquent on your account for 180 days. The lender writes off this debt as a loss, as they realize that the debt won't be paid. An auto loan charge-off is a negative mark on your credit report and it hurts your credit score. A loan charge-off does not mean that the loan has been forgiven, and you are still obligated to pay the debt. The interest and late payments will continue to accrue. Generally a charged off debt is handed over to a collection agency.

Can you keep the car after charge-off?

You can keep your car after the charge-off only if you pay off the debt. The lender won't release the lien on the car until the loan is repaid. The car can be repossessed if you do not pay off the debt. Even if the lender does not seize the car, you won't be able to sell it or refinance it. Moreover, you are still liable to pay off the debt even though you have lost your car.

However, repossession laws differ according to the state you live in. Thus, you need to know your state law regarding car repossession. Some states allow the lender to seize your car without notice at any time after you fail to make the payments on your car loan. But, most of the states have a breach of peace regulations on car repossession. If the individuals repossessing your car commit a breach of the peace while seizing your car, your lender may have to pay a penalty and the repossession may be temporarily halted.

How to handle an auto loan charge-off

If you want to keep your car and remove the charge-off from your credit report, you will have to negotiate a payment plan with your lender. Make sure you get the payment agreement in writing. Once you pay off the debt, you may get the car back. As for the charge-off, you will have to negotiate a Pay for delete Agreement (PFD) with your lender to remove the charge-off from your credit report. A charge-off will be considered a negative listing on your credit report, which will cause creditors and lenders to deny you credit. Therefore, it is better to try and remove the charge-off with a PFD if the lender will agree.

The best way to prevent your car from being repossessed is to repay the loan. There are several options, like a loan modification agreement, available to consumers who wish to keep their vehicles.

Gilbert Paul (not verified)

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Thu, 01/23/2020 - 03:02 Permalink
Judy Madison (not verified)

on my credit report it says write off , charge off. I also have no public record for an approval from a judge to garnish me. Can they do this?

Fri, 01/24/2020 - 15:47 Permalink
Norman (not verified)

Had the car for 3years and made no payments well a few payments but got sick and haven't heard from company but it is in collection, what should I do

Sun, 01/26/2020 - 20:58 Permalink
Norman (not verified)

Had the car for 3years and made no payments well a few payments but got sick and haven't heard from company but it is in collection, what should I do

Sun, 01/26/2020 - 20:58 Permalink
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Sun, 01/26/2020 - 21:58 Permalink
Sharon (not verified)

I'm trying to get my car refinance it was charged off but I still have it. It was charged off in December. Trying to find a leander that will refinance it. Can you help me.

Tue, 02/04/2020 - 12:46 Permalink
mpadget1 (not verified)

What if the charge off is very new to the point where it has not hit my credit or has any negative effect yet, and I still have the vehicle. What options do I have, and what would you say the best thing to do is if I am not interested in paying off the vehicle?

Fri, 02/07/2020 - 17:06 Permalink
Michael2345 (not verified)

My car was involved in an accident. It was hit by an uninsured and unlicensed driver. I simply had no insurance on me or my car either; I was licensed to drive however.

To avoid court dates and future stress, and as neither of us were injured, we agreed (especially me) to go out separate ways without reporting any of the accident. (I hate going to court.)

So I left it alone. I had my car towed to my garage.

Months later, I decided to junk the entire car all together.

All of this time, the car was financed and I continued to pay for it even after I junked it.

I lost my jobs several times and one year and became delinquent with the payments.

I am now nearing a charge off.

What will happen if I left the loan charge off, as the car is junked and scrapped?

The lender does not know of any of these details.

Sun, 02/09/2020 - 04:48 Permalink
Nadiushka madera (not verified)

How I can repay my loan through a loan repayments do I have to use a layer or I can do it by myself

Tue, 02/11/2020 - 16:24 Permalink
Dickson Grey (not verified)

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Mon, 02/17/2020 - 00:28 Permalink
Dionne (not verified)

I have a car that was totalled in an accident. Before that the car has been charged off. Now my insurance company will not issue me the check in my name alone because they said the bank still shows as the lienholder. So do I still need a lien release if the car has been charged off and is off my credit?

Mon, 02/17/2020 - 20:27 Permalink
Carlitos (not verified)

I just Recently made my Account current and was informed that they permanently charged off the car Lon but will allow me to keep the vehicle as long as payments are current. They canceled a repo order but What does this mean exactly? I tried to get come explanation and they wouldn’t offer much. They have revoked my online access and ability to pay other than calling in monthly. I live In SC and still have possession of the car but like to know my options and your recommendations to best come out of this situation.

Fri, 03/06/2020 - 16:48 Permalink
Carlitos (not verified)

I just Recently made my Account current and was informed that they permanently charged off the car Lon but will allow me to keep the vehicle as long as payments are current. They canceled a repo order but What does this mean exactly? I tried to get come explanation and they wouldn’t offer much. They have revoked my online access and ability to pay other than calling in monthly. I live In SC and still have possession of the car but like to know my options and your recommendations to best come out of this situation.

Fri, 03/06/2020 - 16:48 Permalink
jcontreras (not verified)

If I paid the late payments in full can they still charge off my auto loan?

Sat, 03/14/2020 - 16:33 Permalink
Dominique (not verified)

I have a vehicle that has been charged off. My wages have been garnished for the balance of the loan. So every other week they are collecting money from my wages. Are they still allowed to repo the car even though my wages are being garnished?

Mon, 03/16/2020 - 20:44 Permalink
Cyrus (not verified)

How to create a loan modification to prevent repression

Tue, 03/17/2020 - 22:08 Permalink
Cyrus (not verified)

How to create a loan modification to prevent repression

Tue, 03/17/2020 - 22:10 Permalink
Moore Charles (not verified)

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Sun, 03/22/2020 - 00:42 Permalink
Miriam Dickens (not verified)

I need assistance regarding my car as it was charged off for less than 3,000 dlls I was going to repay through BK Chapter 13 that was dismissed. I wanted to pay the arrears but I was informed the debt was charged off and I needed to pay in full over $13,000. The value of the car is around $9,000.

I need advise what other options I have to arrange payments.

Regards.

Miriam Dickens

Tue, 03/24/2020 - 01:43 Permalink
Miriam Dickens (not verified)

I need assistance regarding my car as it was charged off for less than 3,000 dlls I was going to repay through BK Chapter 13 that was dismissed. I wanted to pay the arrears but I was informed the debt was charged off and I needed to pay in full over $13,000. The value of the car is around $9,000.

I need advise what other options I have to arrange payments.

Regards.

Miriam Dickens

Tue, 03/24/2020 - 01:43 Permalink
Miriam Dickens (not verified)

I need assistance regarding my car as it was charged off for less than 3,000 dlls I was going to repay through BK Chapter 13 that was dismissed. I wanted to pay the arrears but I was informed the debt was charged off and I needed to pay in full over $13,000. The value of the car is around $9,000.

I need advise what other options I have to arrange payments.

Regards.

Miriam Dickens

Tue, 03/24/2020 - 01:50 Permalink
Christopher Alers (not verified)

Good day.. my question is, let’s say I reach the date in which the finance company puts my car in charge off, but I can pay two weeks after that the balance of the payments that I owe. Will I be going back to making my normal payments and be out of repo status?

Sun, 03/29/2020 - 22:47 Permalink
mcount1972 (not verified)

My bankruptcy was completed at the end of December. Ally has made no effort to get the car. I have called several times, and my lawyer did as well. How long do I have to wait? Can the car be considered abandoned?

Mon, 03/30/2020 - 23:28 Permalink