Settle Car Debt
The car you buy serves as a guarantee of your vehicle loan. If you stop making car payments, your lender is entitled to repossess your vehicle and sell it. Proceeds from the sale of the car are then applied to the balance of your loan.
Unfortunately, if you owe more to your lender that your car is worth, vehicle sales will not generate sufficient funds to cover the loan balance. If this happens, the end result will cause what is known as a deficiency balance your lender. You can try to solve deficiency balance on your debt car after the vehicle is sold to prevent demand from your lender.
Settle Car Debt
Call your lender after car is sold to find out if there is deficiency balance and, if so, how much it is. Inform lender that you are incapable of paying full sum and request settlement offer. Lenders are well accustomed to having to settle deficiency balances and most will oblige your request.
Prepare for settlement by amassing as much of lump sum payment as possible. You will often be able to negotiate lower settlement agreement if you are able to settle debt with one large payment. Review settlement offer when it arrives.
Counter offer with one of your own. If you are living on Social Security, military pension or are currently unemployed, inform your lender of that fact in your counteroffer. private lender is unable to garnish your wages or otherwise collect from you if you receive government income or are unemployed.
This may make your lender more willing to work with you since it is unlikely to receive payment any other way. Wait for your lender to respond. You will often receive new settlement offer, but be prepared for possibility that lender will adhere to its original offer.
If it does, bump your settlement offer up slightly and try again. Make your payment to your lender and request that receipt for payment be mailed to your home. Keep receipt to prove you paid debt.
We hope this information about “How to Settle Car Debt” is really helpful to you as well as other information related to Debt