There are many forms of defaulted loans; one of them is Auto Loan Default. If you are not able to pay the auto loan then you may have to face serious consequences. The vehicle will be seized by the lender within a certain period of time and you will no longer be the owner of the vehicle. There are different policies and procedures followed by different lenders as to what will happen if someone fails to pay the auto loan.
Some lenders will seize your vehicle within hours of Auto Loan Default, store it in a proper place and later resell it. All the resale proceedings are taken by the lender. On the other hand, some lenders may provide some grace period within which you must pay the defaulted loan and if you are unable to pay your Auto Default Loan within this grace period you may have to face serious problem. However, if you make arrangements to repay your auto default loan after your vehicle has been seized, you will be liable to pay the storage fees and other penalties before you claim your car. Moreover, if the vehicle is resold and the resale proceeds is not sufficient to cover up the loan then you can be sued or you may have to pay the excess loan. And if the resale proceeds are more you may not receive the extra proceeds.
When a person is not able to pay off his or her debt, it affects their credibility. It is really difficult to deal with debt and further it is more difficult to deal with the debt collectors as they in want of collecting their debt often harass the consumer by using offensive and harsh treatment. Therefore, in order to protect the rights of the debtors there is an act called the Fair Debt Collection Act. This act keeps an eye on the debt collectors and prevents them from using abusive and unethical practices while collecting money from the people who owe them money.
According to the Fair Debt Collection Act, the debt collector is not allowed to call the debtor before 8:00 in the morning and after 9:00 in the night. They are not allowed to contact the debtor in his or her office if they have been informed by the debtor verbally or in writing. The debt collectors are bound to provide their verification including the name and address of the original creditor if they have been asked for such information by the debtor. Further, the debt collector cannot discuss the matter of debt with anyone else except the debtor, debtor's spouse and his or her legal advisor as per the Fair Debt Collection Act. Therefore, this Fair Debt Collection Act has been created to protect the rights and interests of the debtors.
There may be many reasons for Auto Default Loan but that does not mean that the debt collectors will harass you therefore, Fair Debt Collection Act has been formed to protect the debtor's rights.
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