Mary wrote in and asked the following question.
“I had a motorcycle repossessed and sold at an auction. They want me to pay the entire loan and a debt collection agency has taken over. What are my options? What is the best thing to do?” – Mary
I wish I had some amazing advice for you to make all of this go away. But I don’t.
When you took out the original loan the motorcycle was pledged as collateral to help guarantee the loan. But if you failed to make your motorcycle payments they could take the bike back and sell it at auction.
The amount they get at auction is subtracted from the remainder of the loan, plus repo fees, storage charges and miscellaneous B.S. charges.
The situation gets even more ridiculous, the amount of the loan written off by the lender becomes taxable to you, you’ll owe income tax on that amount, just as if you earned that money.
And while you would think the lender would be motivated to sell the bike for the maximum amount possible, they just unload them at auction and go after you for the balance.
You have a few options:
It would be a mistake to make a repayment promise that you are unlikely able to continue to make over the following years if you are just getting by as it is. In that case, talking to a bankruptcy lawyer is probably the smartest thing to do right now.
The worst part Mary is that you’ve lost your ride. Taking some trips on the bike right now might actually help to ease your worry and stress. Nothing like a good set of twisty roads to make you forget your worries and feel like you’re flying.
If you have a question you’d like to ask, send it to me here.