In the state of Michigan can they take money out of a bank account that has your name on it after they repoessed your car?

Answer 1

It is quite common in Michigan for lenders to seek judgment against a defaulting party in tandem to pursuing repossession of real property. Think about it this way:

Say you are $1000 behind in payments. If the only balance is that $1000, it could become a much greater amount after the vehicle is recovered, stored, transported, and stored again before auction. If the final amount at auction is only $1000, you could still be help responsible for the remaining balance owed.

Another way to look at it is this:

Balance owed on the vehicle: $1000
Recovery costs added to the balance: $500
Legal fees added to the balance: $1500
Collection fees added to the balance: $500
Post recovery storage fees: $450
Transportation fees to auction: $200
Preauction storage fees: $400

That original $1000 balance became $4050.00. Now, at auction, the vehicle was sold for $2000.00. There remains an unpaid balance of $2050.00, and the vehicle that originally secured the loan is gone. The lender must have a way to recover what is owed to him. His only recourse is to seek judgment. In the state of Michigan, a lender with a judgment may recover owed debts by any or all of the following:

• Garnishment of bank accounts
• Garnishment of wages
• Garnishment of state tax returns
• Liens on other real property such as homes and other vehicles
• Liens on other forms of income such as produced goods, farm sales, livestock
• Liquidation of other real property: stocks, bonds, Certificates of Deposit, homes, vehicles, or other goods.