John Treason Asked: What legal right does a bank have over a car loan if they do not have a signed promissary note?

I purchased a used car in Texas back in 2005 and it was financed through Navy Federal. I was almost finished paying for it back in 2009 but had fallen behind in my credit card payment with Navy Federal. They said that they can take the car if I am behind on any loan so they put me into a new debt consolidation loan worth almost 10 grand.

Since then, I have become disabled due to injuries sustained while in the Navy. I am getting disability now through the VA but it is not enough to cover all my monthly expenses and the vehicle. I told Navy Federal to lower my payments but they refuse to work with me since they say I owe too much. I called them yesterday and told them that I wanted them to come and take the car but they said that they do not want it. The guy suggested that I try to sell the car to carmax and then apply the money towards the loan.

My question is, What legal right does Navy Federal have over me with this car and the money I owe. The car is only worth around 3 grand and I owe 8 grand on the entire loan. When I originally got the car in 2005, I never signed a promissary note. When they consolidated the loan again 2 years ago, I never signed a promissory note at that time either. I understand that either way it goes, my credit will take a hit but truthfully, I am more concerned with my health at the moment. Does anyone here have any advice on what I can do? I'm thinking about selling the car to carmax but I really don't want to get screwed since I obviously have never been in this situation before.