Can they garnish your wages for a car loan?

I wasn’t able to pay for my car loan and the lender repossessed it. They sold the car at auction, but it wasn’t enough to cover the loan amount. Can they garnish my wages to pay for the remaining balance?

Answer
Sorry to hear that your finances aren’t working out, but you’ll get it! As far as your car loan is concerned, a lender can garnish your wages. However, this is a worst-case scenario that typically only happens if your car has been repossessed and the auction amount still leaves a remaining balance on your loan.
When a lender repossesses your car, they sell it at auction and apply the proceeds toward your car loan. If you have any remaining amount, the lender can either garnish your wages or send the remaining amount to collections.
If the lender sends the amount to collections and you still don’t pay, they can get a court order to garnish your wages. Again, this is extremely rare and typically doesn’t happen unless you don’t pay the remaining balance of the loan.
In your case, reach out to your lender to work out a repayment plan. Many times, the lender will accept smaller monthly payments until you repay the loan.
If you’re still driving another car during this time, explore new car insurance policies and compare rates with the Jerry app. By finding a new policy, you can save nearly $900 per year that you can put toward your remaining loan balance.
As a licensed broker, Jerry can help you find and compare quotes from over 50 top providers, including Nationwide, Allstate, and Travelers, in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!
Eric Schad
Answered on Nov 30, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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