What is Voluntary Repossession?

The only difference between a voluntary repossession and an involuntary repossession is that, with a voluntary repossession, you do not incur the lender's expenses to hire a repo man or any other costs associated with repossession.

A voluntary repossession will be reported on your credit report just like any repossession. It may show as a voluntary repossession on some reports. No matter how the repossession is described, it's going to negatively affect your credit score.

When you do a voluntary repossession the lender will calculate what is still owed and you will be responsible for that balance. The lender will attempt to obtain the payoff balance when selling the asset. However, if the sale is deficient you will be responsible for that portion of the balance.

If you are not able to pay the deficiency owed, the lender can seek a court judgment against you. Although rare, occasionally the lender recognizes there is no real hope of collecting a judgment so they don't proceed any further. However, the repossession will still show on you're your credit report.

If you want to avoid the negative impact of repossession, bankruptcy may be your only option. You should consult with a bankruptcy attorney to see if this is a solution for you. 

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