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?

Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
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,
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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