What happens to my loan if Ford/Chevy etc go under?

[Maab of the Ten Tribes]

The other thread about "what happens to my bank account if.." got me thinking. My car loan is though Chrysler. What happens if Chrysler goes under? I know its wishful thinking (for strictly selfish reasons) that it would just go away....or would the loan just be passed onto another bank?

 

[Mallory]

If Chrysler were to enter a Chapter 7 bankruptcy (liquidation), someone will surely buy up the assets. Those include your loan. It won't be going away.

 

[CommodoreKong]

No matter what type of bankruptcy they would enter you would still have to pay your loan.

 

[Augustus]

especially if your loan is through a bank (like most loans are) and not the car company.
If you have a loan through Chase Bank for example, then bankruptcy wouldn't affect your loan at all, is the way I understand it.

 

[Maab of the Ten Tribes]

I write my checks out to "Chrysler Financial" so i was hoping if Chrysler went under maybe all of their banks would too. Yeah i know, bad for the economy, but good for me (at least for the immediate future).

 

[Augustus]

hey, that would be awesome! good luck! but car ownership is usually not so easy

 

[Holdfast]

Being an outstanding debt owed to them, your loan remains a potential asset to the company that would be repackaged & sold on along with all the other assets it has.

However, depending on HOW its sold on, it's possible it could be written off as too expensive to realise. In practice, these sort of commonplace consumer loans are easy enough to transfer across to new systems and collect cheaply... you're not going to get out of it!

If you had a special facility for a several million dollar loan from them, it would probably be easier for you to default on that if they went bankrupt than just having a few thousands or so regular consumer loan.

 

[cultcross]

Being an outstanding debt owed to them, your loan remains a potential asset to the company that would be repackaged & sold on along with all the other assets it has.

However, depending on HOW its sold on, it's possible it could be written off as too expensive to realise. In practice, these sort of commonplace consumer loans are easy enough to transfer across to new systems and collect cheaply... you're not going to get out of it!

If you had a special facility for a several million dollar loan from them, it would probably be easier for you to default on that if they went bankrupt than just having a few thousands or so regular consumer loan.

So you're saying he should buy several thousand Chevy cars...
Interesting.

 

[ShamelessMcBundy]

Being an outstanding debt owed to them, your loan remains a potential asset to the company that would be repackaged & sold on along with all the other assets it has.

However, depending on HOW its sold on, it's possible it could be written off as too expensive to realise. In practice, these sort of commonplace consumer loans are easy enough to transfer across to new systems and collect cheaply... you're not going to get out of it!

If you had a special facility for a several million dollar loan from them, it would probably be easier for you to default on that if they went bankrupt than just having a few thousands or so regular consumer loan.

So you're saying he should buy several thousand Chevy cars...
Interesting.

It would save the company.

 

[cultcross]

Being an outstanding debt owed to them, your loan remains a potential asset to the company that would be repackaged & sold on along with all the other assets it has.

However, depending on HOW its sold on, it's possible it could be written off as too expensive to realise. In practice, these sort of commonplace consumer loans are easy enough to transfer across to new systems and collect cheaply... you're not going to get out of it!

If you had a special facility for a several million dollar loan from them, it would probably be easier for you to default on that if they went bankrupt than just having a few thousands or so regular consumer loan.

So you're saying he should buy several thousand Chevy cars...
Interesting.

It would save the company.

So whadya say Maab? take one for the team?

 

[Emher]

So you're saying he should buy several thousand Chevy cars...
Interesting.

Go for it I know I'd buy two Camaros, a Corvette, a Malibu and a Suburban if I could Guess I'll have to settle with just a Camaro at some point.

 

[Holdfast]

Being an outstanding debt owed to them, your loan remains a potential asset to the company that would be repackaged & sold on along with all the other assets it has.

However, depending on HOW its sold on, it's possible it could be written off as too expensive to realise. In practice, these sort of commonplace consumer loans are easy enough to transfer across to new systems and collect cheaply... you're not going to get out of it!

If you had a special facility for a several million dollar loan from them, it would probably be easier for you to default on that if they went bankrupt than just having a few thousands or so regular consumer loan.

So you're saying he should buy several thousand Chevy cars...
Interesting.

It would save the company.

I'm always thinking of the big picture...

 

[Guartho]

But once he saves the company, they won't go under and his debts won't be written off.

 

[Holdfast]

It's just a bridging loan. Once the company is saved, it'll be written off in gratitude.

 

[ShamelessMcBundy]

That's the spirit!

 

[Brolan]

No way you are getting out of the loan. Even if the loan is sold at at discount the company who buys it is going to come after you for the full amount. That's how some finance companies make their money.

 

[nx1701g]

I checked with my auto dealer about this very thing when I bought my new Ram. If Chrysler Financial enters into bankruptcy they can call in all of their outstanding loans for immediate repayment. It was a clause in my contract (I bought in December). I don't know about previous contract years though. I think that it was a clause in my 2006 lease agreement too though.

Edit to add: Yahoo was reporting today that many dealerships in the US are closing due to the current economy. If you take your vehicle and trade it in WITHOUT having paid it off ahead of time make sure (and get it in writing) that the dealership will pay off what is left of your loan. Yahoo was reporting a lot of dealerships aren't paying off what remains of the loans and the original owner is getting stuck with the bill of both his original vehicle and the new one (regardless of if it has been sold or not).

 

[Tiberius Jim]

I know nothing would happen to my loan for my Silverado, as it's made through Bank of America and not General Motors.

 

[Roger Wilco]

Zombiespam - tasty.

 

[Pingfah]

I, for one, will be contacting this amazing sounding company IMMEDIATELY.