Question

Jason used his car as collateral to borrow money from his bank. After losing his job, Jason is now unable to make his monthly payments for the loan, defaulting on the loan. If Jason is unable to continue to make his payments, what is likely to happen to his car?
a.
The bank will ask Jason to sell the car to help pay back his loan.
b.
The bank will seize the car and likely sell it to pay off Jason’s loan.
c.
The bank will notify the local government of Jason’s default on his loan, making it illegal for Jason to drive the car.
d.
The bank will put a “boot” on one wheel of the car, making it un-drivable until Jason begins making his payments again.


Please select the best answer from the choices provided

A
B
C
D

Answer 1

B — The bank can repossess (seize) the car used as collateral and typically sell it (often at auction) to apply the proceeds to the outstanding loan balance.