Vehicle Repossessions

Once a vehicle is repossessed for non-payment, the lien holder will sell the vehicle to attempt to pay off the balance that is owed. Prior to the sale of the vehicle, the lien holder is required under the law to send notices to the consumer. The notices to the consumer give certain rights which include the redemption of the vehicle.

Once the lien holder sends the required notices and waits a specified time period, they are then permitted to sell the vehicle. Vehicles are typically sold at auction or through wholesale channels.

Once the vehicle is sold, the lien holder will calculate if they have a loss. The loss is calculated by deducting the amount the vehicle was sold for from the principal balance that the consumer owed. The loss is called a deficiency balance.

Once the deficiency balance is calculated, the lien holder will attempt to collect that amount from the consumer. The lien holder will often sell the deficiency balance debt to a collection agency for them to collect.

The loophole in the laws for this tactic is simple. If the lien holder does not send the proper notices to the consumer that notifies them of their right to redeem, the deficiency balance is typically considered uncollectable! The following letter sequences utilize this strategy to get the repossession item permanently deleted from the consumer’s credit report.

This letter sequence should only be used after 2 years have passed since the vehicle has been sold. This should not be used if there was a judgment filed from the lien holder.

Visit www.CarFax.com to obtain the V.I.N. (Vehicle Identification Number), if you do not have it on file.

Send letters via traceable mail with a return receipt.

If you have any other questions, let us know.