Dear Sir,
Normally, the answer to this is yes. The contract you signed created an obligation to pay a certain amount of money in a certain amount of time. The bank sells the car at an auction, deducts what they sold the car for from the balance you owe, and then you owe the remaining balance. Even though you don't have the car doesn't mean you don't have to pay back the money that you borrowed to purchase the car. You would probably be better of to keep paying the loan back. Ther are only a few ways you can completely expunge the debt which are either to completely pay back the loan as it is stated in the contract, renegoiate the terms of the loan with the bank, refinance or to declare bankruptcy. Bankruptcy is definitely not a good idea because your credit rating will be totally destroyed. You can find a good article about ebt management techniques here: http://www.mortgageloan.com/five-strategies-to-get-out-of-debt I am sure that there would also be some refinancing options available.
Regards,
XXXXX XXXXXXX
Lawyer
BEc(SocSci). LLB (Usyd) - 5 years of Work Experience