What are the consequences of voluntary repossession?
In a voluntary repossession of a vehicle, a lender may sell the vehicle and try to collect any difference owed between the loan amount due and the sale price. The lender may also add on costs for towing, repossession, storage, late fees, auction, interest, reconditioning, and other costs. If the lender gets a judgment for these claimed losses and you are unable to pay, it it possible the lender may get a judgment lien on your assets, garnish wages, or attach bank accounts, in order to collect on the judgment.
A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.