Repossession in Florida: What Happens After and Your Liability

Dealing with car repossession can be a stressful and complex process. In the state of Florida, there are specific rights and responsibilities that both the lender and the borrower must adhere to. This article aims to clarify what happens after your car is repossessed and what liabilities you might face.

The Repossession Process in Florida

When a lender repossesses your car in Florida, the vehicle is seized and typically sold at an auction. The sale proceeds are used to reduce the outstanding debt and cover any associated fees, such as storage and repossession.

Example Scenario

Suppose you owe $10,000 on your car, and the lender auctions it off for only $8,000. In this scenario, you will still be responsible for the remaining $2,000, which is the difference between the loan amount and the auction price.

Liability for Remaining Debt

After the car is repossessed and sold, any remaining balance on your loan can result in additional charges. The balance plus any repossession and storage fees will typically be owed by the borrower. For example, if you owe $5,000 on your car, the lender sells it for $3,500, you will need to pay the remaining $1,500.

Grace Period and Negotiation

Many states, including Florida, offer a grace period for the borrower to get current on the loan. During this period, which is often about 30 days, you can try to pay the past due amount to avoid further actions from the lender.

In some cases, you might be able to negotiate a voluntary surrender of the car in exchange for a reduced balance. This approach can sometimes completely settle the debt. However, this is not always possible or favorable for the lender, so it is important to explore all options.

Vehicle Auctions and Liabilities

The vehicle may go to auction if you do not get current on the loan within the grace period. If the auction price is lower than the remaining balance, you will still be liable for the difference. This means that if the lender sells your car for less than the amount you owe, you will still have to pay the additional amount.

Impact on Your Credit Score

Regardless of whether you pay off the remaining balance or not, the repossession and the associated fees will likely affect your credit score. Even if the auction proceeds cover the entire loan, your credit score will still suffer from the repossession.

Conclusion

Repossession is a serious financial matter with potential long-term repercussions. If you are facing the possibility of having your car repossessed in Florida, it is important to understand your rights and responsibilities. Explore your options, including negotiating with your lender, to find a solution that minimizes the financial impact on you.

For more information on car repossessions in Florida or to discuss your specific situation with an attorney, contact a legal professional.