Impounded vehicle with loan

Impounded vehicle with loan
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Apologies if this has been posted in the wrong forum…

I have a car that I purchased three years ago. I put 50% down and financed the rest over 6 years. I have never missed a payment. There is a lot of equity in the car right now. About three months ago, my car was impounded by the Los Angeles Police Department. There is a detective hold on the car so the OPG lot will not release it to me. I have an attorney and our attempts at getting the car released have been unsuccessful so far. As part of the impound process, the OPG lot informed Ally Bank (my lienholder) and Ally has removed all account access for me. When I log in to my online account, it shows “No Active Loans.” When I check my credit report, it does not show “paid off” or $0 balance. I’ve been making payments through Ally’s Western Union service although my last three payments have not been reflected on my credit report. I am still “current” but there is no mark for payments made.

I’m wondering if anyone knows legally, am I required to continue making my payments? Can I be penalized if I stop making them? I do not want to ruin my credit.


Hi Toog4me – so sorry for the tangle of trouble you’re facing.

I’m quite sure the bank expects its payments until the loan is satisfied, no matter where the car sits or whether you can drive it. (This is a situation sometimes faced by people whose cars have been seized for a DUI arrest.)

If you stop making payments the bank would eventually try to repossess the car (which is an interesting idea given where it sits), and every missed payment up to that point would already have knocked sizable chunks from your credit scores.

A good overview: How a repossession affects your credit

I don’t know why the lot or police agency would limit your account unless that is their policy for ensuring the integrity of material evidence. But that would not affect the debt you legally owe.