Can a bank garnish wages right after repo of a car?
ok so here are the details, i got a pay cut at work from 60k to 31k a year, i have already closed the CC and informed everyone of my loans what happened.
today i get a call from Auto Loan company which has my auto loan that i can not afford anymore and wanted to see where things were if i was able to sell it or not.
i got a different manager and what he told me scared me
he said that after the repo takes effect that what ever the difference after the car has been auctioned they will bill me. which i knew but what he said was that they will right away garnish my wages
now if that happens there no way i can afford anything at all
is this true? i thought they would send me a bill and i could at least make payments and go from there. I did let him know that if i cant afford the payments how will i even be able to afford the garnishments to afford my mortgage and basic bills like electricity water food??
so again is this true? what can i do to avoid this without doing a bankruptcy
They can not garnish your wages without going to court and getting a judgment.
They can repo the car. They will sell it at auction. They will hold you responsible for the difference. Usually they will send you to collections for this amount. They could go to court and get a judgment, however they would have to convince the judge this was the only way they could collect. You may be able to convince the judge otherwise.
If they do get a judgment, the judge will usually set it at a level that will allow you to make your other obligations like the mortgage and food. Forget about a vacation, though.
A creditor must obtain a court judgment before it can garnish. It is not, however, required to accomodate you with a payment plan for a default debt.
Yes, the will come after you for the difference between auction price and the loan balance, plus repo and auction fees. By the way, cars sell very cheaply at auctions. It’s not unusual for the amount still owed to be close to the original loan balance. You would be better off to sell the car and pay the difference.
But, before they can garnish your wages, they will have to sue and win a judgment. With that judgment they can garnish (max 25%) your wages, attach your bank accounts, and lien personal property.