My Car Was Picked Up By The Repo Man. What Happens Next? – Michelle


“Dear Steve,

I was laid off last Fall, and have been unable to find work (not even part-time). I fell behind in my car payments and am no longer able to afford the car. The finance company repo’d the car without notice, and will not talk to me about what I am supposed to do next. Am I just supposed to sit here and wait for a lawsuit to be served???

What usually happens after your car is repo’d? Can I be sued even though I don’t have any income? What recourse do I have, if any?


Dear Michelle,

Recourse huh, not a whole lot. Without income to bring your loan current or payoff the loan I’d say this situation is going to result in the following.

  1. Your car will be stored until the public action. You will be billed for that storage and the repo itself.
  2. At the public auction your car will sell for less than the value of the loan.
  3. The lender will send you a huge bill for the difference between the balance of the loan plus repo and storage fees and what the car sold for at auction.
  4. You probably won’t be able to pay that big bill.
  5. Once you get employed again, and depending on the size of the bill and potential subsequent lawsuit for the bill, you’ll probably go bankrupt.

Was this a car that you financed from the local lot you bought it from? Were you making weekly payments to a local car sales place?

Please update me on your progress by

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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5 thoughts on “My Car Was Picked Up By The Repo Man. What Happens Next? – Michelle”

  1. I had to return a car I purchased it broke down the next day I returned it and was giving another car before leaving the lot i asked if we needed to rewnew the contract for the this car he said no worries I’m good 8/29/18 the came and took the car when I went to the store to see why they took the car he said I stole it from them and woudntwo tlkt to me about it can they use the same contract for the broken car and roll it over to the repo one

  2. Before you jump behind the wheel of your new car give yourself complete peace of mind and ask about the great GAP and car finance options available.

  3. I don’t always promote speaking with an attorney, but I do think that Michelle would have been best served by speaking to a lawyer before it came to this.

    I understand that it is sometimes difficult to see a situation like this coming, but everyone must at least give some thought to what they would do if confronted with such a situation.

  4. Hi Steve,

    Thank you for responding so quickly!

    No, the car was not financed through the local lot; it was financed through a national auto loan finance company.

    The car is the only debt I have, so I would hate to file bankruptcy just for the balance of the loan which would be less than $10k. But I hate that I have to pay for a car I no longer own.

    At least I have the comfort of knowing that I won’t be the only one with horrible credit after this national economic meltdown! The bad part will be that I will not likely be able to get a job without good credit (I’m in real estate finance – lucky me), and I can’t rebuild my credit until I get a job. A total catch-22. This sucks.

    Thank you again for your help.

    • Michelle,

      The good news is that this incident and even a follow-up bankruptcy should not prevent you from getting a job. Even though it may be disclosed on your credit report you’ve got a reasonable story to explain it if asked.

      The less you hide from this reality the faster you will recover.



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