Can a debt collector take my car with a lien on it over unpaid medical bills?

First off, I'm sorry that you had to undergo cancer surgery, and we will be praying for a good result from that. You might to call a financial planner to help you through this rough spot, especially with the added concern of your medical procedures. Moneywise.org is a good one. You can send them a question at questions@moneywise.org. There is no charge a simple Q&A as far as I know.

Any company that has lent you money would rather have you pay interest rather than go to the hassle of selling off your property at an auction to recoup some of the loss on your account. So, that works IN your favor to keep the car, but AGAINST you since they will likely raise your interest rate in a market that already has increasing rates due to the Fed!

Whether you bought your car on time, with a loan or a promissory note, that loan is secured by the value of the car (collateral). They can most likely be able to take it, but would rather re-negotiate a loan plan with you rather than fuss around. Do NOT ignore them. Tell them you want to work something out and take it from there.

Your last resort would be to go to a "debt consolidation" agency. They help to negotiate down the repayments with all your debtors, give them a somewhat reduced lump sum to clear your account, but then they create a new loan for you to pay back the agency.