How To Get The Title For A Car That Was Charged Off (2022)

You may regain the title for a car that has been charged off if you are able to negotiate a settlement with the assigned debt collection authority.

Although the car has been charged off, you are by no means free from servicing the associated debt.

Despite the debt being handed over to a debt collector, the lien on the title of the car still belongs to the original creditor.

And in order to acquire the title, it typically involves full payment of the debt or at a reduced amount.

car certificate of title

Once this happens, the creditor will usually contact the DMV (Department of Motor Vehicles), after which the title of the vehicle is released and issued in your name.

Ideally though, it is best to settle the amount owed, possibly including any fees (e.g. from repossession and auction) and interest, with the lender before it is charged off.

Who holds the title of a financed car?

When a consumer buys a vehicle with a loan, it is the lender that is listed as owner on the vehicle title.

The borrower is listed as the registered owner. This is because the vehicle is being held as collateral against the money borrowed.

Until the loan is paid off and the title is released to the borrower, the lender remains as owner.

If the customer defaults on the loan, the vehicle will be repossessed and sold by the lender or signed over to an auction house.

car repossession

If the vehicle is sold or auctioned for less than what is owed, the remaining balance will be charged off as a monetary loss, and is often handed over to a collection agency.

Until then, the lender still holds the title, both physically and as a recorded lien.

Do I still own my car if the loan is charged off?

Whenever there is a loan against a vehicle, it is the lender who owns the car.

Ownership only transfers to the borrower after the loan is paid in full, and the lender releases the title.

How can they take my car if I still owe money?

This is precisely why the lender can repossess a vehicle if the borrower has failed to pay.

The vehicle belongs to the lender, and they will reclaim their collateral in an attempt to recover some or all of the remaining debt by selling it or having it auctioned.

Can I pay the charge off and get my vehicle?

Possibly, but the circumstances would be entirely at the lender’s discretion.

If the car has already been repossessed and the borrower is now rallying to buy it back, some lenders may deny the purchase on principle but others may welcome it.

From the borrower’s standpoint, paying off the vehicle after it has been repossessed is more costly because fees and interest have accrued and added to the amount owed.

What happens if I just hide my car until I can catch up on payments?

In the case of a secured loan, this is not an option. Prepare to be served with a summons to appear in court if the vehicle is not turned over to the lender as requested.

You may also face the possibility of being arrested after driving what is now considered a stolen vehicle.

It will most likely lead to the vehicle being forcibly removed from the your possession.

What does the lender do with the car when it is repossessed?

Often the lenders will sell the vehicles at an auction to the highest bidder and resolve to take any remaining balance as a loss.

Some lenders will offer the car for sale locally. Either way, they may only sell for the amount owed plus any collection and repossession fees.

How can they sell it if I don’t agree?

If I file bankruptcy and include the vehicle loan, can I keep it? 

A good bankruptcy attorney may be able to have the vehicle value “crammed down” to less than what is owed, but this is a case by case scenario.

However, it is not getting the title back as much as keeping the title and paying off an agreed portion of the loan as determined by the bankruptcy court.

Ideally, a bankruptcy attorney should be consulted prior to the order of repossession being issued.

Can I buy my car back when it is auctioned?

Possibly, but the cost will likely be higher than was originally owed due to collection, repossession, and filing fees.

It is smarter to work with the lender early on. Prevention is always easier than recovery.

21 Comments

  1. What if I last paid in August or September 2018 and my car 14 civic never got repossessed? I was written on my report for a few years ‘charged off bad debt’. We’ll all three reports have no history of my loan or of the collection. My auto loan was through suntrust but they merged with another bank and I’m wondering how this happened and how do I get a title? Greenpath financial said they’ve seen it happen where it falls through the cracks when merging.

    • It’s true, given the loan volume of some financial institutions and the massive amount of information transferred during corporate mergers, there can be operational gaps that (for better or worse) impact borrowers such as yourself. I cannot speak to why SunTrust never physically repossessed the vehicle, but the debt is still owed, regardless of whether you choose to proceed with payment.

      Getting a title free and clear in this situation is not simply going to the DMV to remove SunTrust as legal owner. SunTrust doesn’t exist anymore, but everything that belonged to SunTrust now belongs to BB&T (new name is Truist).

      It varies by state, but to have SunTrust removed, it’s likely the DMV requires some sort of notarized affidavit from BB&T (Truist) stating they have no further interest in the vehicle. BB&T may not be willing to provide this when you tell them there is money owed.

      Occasionally creditors will take a loss on a volume of delinquent accounts without selling them to third-party collectors, but when and why remains a mystery and probably has something to do with their balance sheet or examiner findings.

      There is no way to know if your situation is temporary reporting blindness on the bank’s part. If your last payment was in 2018- it takes 6 months of non-payment to be in default and subject to repossession- and the bank merger did not complete until 2019? There is still plenty of time for the debt to resurface and be sold to third-party collectors (and may have already been).

      Best of luck to you.

  2. Hi,
    I know of a car that was supposed to be repoed 2 1/2 years ago. This prison told the lender where it was. They never came. It was a 2016 with 100k but the tranny was bad. Account still owed is about 20k. No original bank loan papers. If this person called to get copies of it.. Would it reopen or restart the clock and/or then will they come get it? This person was told by a friend at the dealership that the title is still with lender.. How they knew that I don’t know. Anyway should this person call lender to buy title at low price or should someone else call to e if they can buy it.. Or maybe even a lender will just get rid of it? I mean if anyone was to take the car and get into an accident wouldn’t the lender be responsible since they have title and loan has been closed and Charged off as bad debt, Profit and loss write-off.. Per credit report. Thanks for any help

    • Hi Nadine,

      Thank you for your comment.

      I can’t imagine why the lender didn’t take possession of the vehicle unless it is because the borrower had placed it in a location that was extremely inaccessible or somehow made it physically difficult to acquire. If the vehicle was placed in a locked or secure location, it may not have been worth the legal effort to confiscate it. I don’t believe it is possible to have ‘no original bank papers’ because there is quite certainly a record in the bank’s system of the borrower’s loan application, disbursal, payment history, delinquency, collection efforts, default, and (attempted) repossession.

      It is accurate that the title would still be with the lender because as the legal owner, they did not relinquish their interest in the vehicle. Had the bank been able to obtain the vehicle and sell it at auction, they would have relinquished their ownership at that time.

      It seems the former borrower is trying to find a way around dealing with the lender to which they technically still owe $20,000. As a former lending manager, my first question would be ‘how does this person even know about the vehicle’ and my second question would be ‘why the bother?’ It seems like a lot of effort to obtain a nearly 7-year-old vehicle that has been sitting for over two years with a failing transmission and a defaulted loan history. There are plenty of other 2016 vehicles for sale out there.

      But if they feel it is worth pursuing, for whatever reason, my best advice is to consult with a bankruptcy/debt recovery attorney regarding the scenario. Best of luck!

  3. Hi

    Loan defaulted on a 2012 Camry with Wells Fargo in Sept 2016. Received a Notice of plan to Sell Property on 10/16 that “We have recovered your 2012 Camry, vin #……because you broke agreement it will be sold at private auction on 10/24. Car is still in the driveway, No one ever came to repo it. Years have passed….mind you this is Wells Fargo. I received a letter on Sept 2021 stating this loan charged off on Sept 2016 and on May 2020 we reviewed the account and determined due to the age the account is closed and we have canceled the remaining debt. As a result we will not attempt to collect this debt and no additional payments are required, the balance is zero. My question is, who’s holding the title? Would I be able to get it from the DMV?

    • Hi there,

      Your best option is to contact the DMV and explain the situation. Make sure you have copies of the correspondence from Wells Fargo to provide to the DMV. Depending on the state, the process to obtain a free and clear vehicle title may vary, but it seems apparent that Wells Fargo has relinquished its interest in the vehicle. Best of luck to you in resolving this situation!

  4. interesting but my issue is a little different. I owed 4K and arranged payment. Repo man came and ended up injuring my husband. It meant then that they violated credit and collect and they payed me 5K but never gave me my title on an uncollectable debt….. NOW the car is 17 years old and would be nice to have title. Still best car ever.

    • Hey there,

      Have you tried contacting the DMV at all? I’m also curious whether your debt has been removed from your credit report, considering the age of your car. Perhaps present it to the DMV as they may be able to transfer the title in your possession, especially if the original creditor no longer has a vested interest in collecting any debt. Let us know how you go!

  5. So I have this car where the engine blew up 5 years ago. It charged of later in the year with only $4200 dollars on it. The bank has refused to take it for obvious reasons. Now when they sent it off to collections and when they called me they were threatening jail time and all that jazz. So know full well they can’t do that, I had called the bank who then at that point took it back. Now however when I try to called the bank and they said collections still had it. I call the collections agency and they say they don’t have it. I recalled the bank and they tell me it don’t exist. I’ve disputed it however it came back still there. What would be the next path to approach. I’ve debated calling bank and offer $1000 for the removal and title. What should I do if anything? The car is currently sitting on family property and needs to go. I’ve had people tell me to tow it else where and the responsibility will fall on the bank. I need to get it resolved and in the best way possible. Any ideas would help me a bunch.

  6. Hello!
    Here’s a ? For ya. I need to get the title for a vehicle that got sent to collections. It is not in danger of repossession. One Main Financial stated I could not voluntarily return the vehicle. They do not want it if it is worth under 6k. It needs more work than it is worth. I want to junk it ASAP! I have no where to put it.
    If ANYONE has any ideas…please let me know!!!
    Thanks!!!
    Angela

  7. A question can a dealership report a charge off account if there was no sales contract ever signed? Or can they repossess the vehicle?

    • Hi Pete,
      A charge-off is associated with a creditor realising a financial loss as a result of the consumer falling delinquent on payments. Is the dealership also your creditor? Do you own the vehicle? Your question regarding whether they can repossess the vehicle seems to indicate that you own it. The bottom line is that only your creditor can charge-off your car and send the debt to collections. Please clarify your situation so we can provide more guidance. Also, please do not misconstrue any of our comments as financial advice, but as recommendations. Seek a local financial professional before taking actions or making any big decisions.

  8. One Main has title loan in co owners name not mine. My co-owner past away in 2019. No one has come to get it. I’m sure it has been charged off by now. They can not give me any information because it is in her name. no contact with me unless I call them which don’t do much cause it’s in her name. How can I get a title to junk the truck. I am the co owner with no ties to the loan.

    • Hi Anna,
      First of all, we just want to extend our condolences to you. Can I ask how are you classified as co-owner of the vehicle if your name is not listed on the title? Typically, if you are co-owner of a car, your name should be on the title as well, in which case, you can head over to your local DMV with the death certificate and title in hand in order to transfer the title entirely under your name. However, this is only possible if your name is on the title. Also, that fact that you are not co-signed with the associated loan should be irrelevant. Please do not misconstrue our comment as professional financial advice. Should you require actionable advice, please seek the help of a local financial advisor. Please let us know how you go. All the best.

  9. hello I have a vehicle last payment made was in 2018 I still have the vehicle and it was charged off as bad debit but removed from credit account because it was original signed through another bank not the bank that issued the charge off it’s been 3 years since I have heard anything from the bank about the car it wasn’t sold to a collection is there anyway I can call and get the title for lesser that the charge off do I even wanna call and bother them

  10. Due to the pandemic I had some set backs like many people …unfortunately I also caught covid during my pregnancy & was out of work as well. I recently checked my credit reports & saw my auto loan was “charged off & closed” with no further information about a new debt collector or any of that & they never repossessed the car …what does this mean? What am I supposed to do now ?

  11. Lost my job during pandemic could not keep up the payments on my vehicle. Was forced to move back home to Arkansas from Georgia. The car was recently charged off on my credit but has not been repossessed, i am now working and trying to bring the payments current but i also have no insurance. I am in Arkansas but car is registered in Georgia how do i go about getting title transferred to get insurance in my new state or should i keep it insured in Georgia?? I’m so lost please any advice

  12. I bought a 2019 Ford EcoSport. My fiance told the dealership of a job that I had in 2006 and money earned that I made at one time, up to 2006 before I became partially paralyzed. He lost his job at this point, lost our home and we’re bankrupt however we didn’t file bankruptcy. He looked at a compact small car because we really needed it. Once he clicked on the dealer website they hounded him to buy, like he was a good employed person. So that is when he gave my old job at the hospital, my old earnings etc. The dealership called and I was approved. They said come sign papers. Very shocked we thought what a miracle. My fiance tried to find a job. He couldn’t it wasn’t going well, food was a priority and we slept in the car or at friends. The first payment came due. Couldn’t/didn’t make it. In fact, we weren’t able to make ANY payments at all. So now the bank charged it off. Never tried to repossess it or anything. At 66,000 miles the engine quit working. It is seized and can’t be fixed. It is a problem that shouldn’t have happened at 66,000 miles. The rest of the car is brand new like. Beginning at 57,000 miles the car began having issues and would have qualified as a lemon since it began happening 1 year and 3/4 of a year into possession. I want to know if I could get my title. The vehicle was 26,900 and the interest rate 19%. The payment was 600 something I think 678?? Anyway I want to put an engine a new engine in the vehicle and maybe even a transmission because the car would also buck, or bang into gear. A mechanic said I more than likely need a transmission and definitely an engine. What should I do? It’s not worth nowhere near what I paid plus less now. I can’t pay that much and now it’s mechanically worthless. Can I get my title. The dealership I feel acted unethically, they wanted or did push the loan. They never checked/verified the job or income. They never asked for paystubs, they did all this over the phone. It’s crazy. It was a blessing don’t get me wrong. This dealership is a large, very large, multiple dealership company. Can I get my title? What do I do?

  13. Purchased a 2015 5th wheel RV with a $36K loan from USAA. Made payments for 3 years and stopped making payments in 2018. The RV has been stored and the debt was charged off. Now that my finances are in a better position, what are my options?

  14. Hello,
    I am in the middle of a divorce. I orginally took out the vehicle for my ex spouse and just found out that he has not paid on the vehicle since March of 2022. I just logged into my credit karma account and it shows that the car loan has been “charged off”. What exactly does that mean? My ex still has the vehicle so it obviously has not been repossessed. Since it has been “charged off” can they still repossesses the vehicle? Can arraignments be made with the new debt agency and still keep the vehicle? I’m genuinely confused. I need some answers.

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