Many times a job loss, illness, death in the family or divorce cause a hardship making it difficult to keep up with financial obligations. When a borrower defaults on auto loan terms, such as late or partial payments, a lapse in insurance coverage, or death of borrower, the lender may choose to repossess the vehicle.
The loan agreement signed at the time of purchase, or Retail Installment Sales Contract, details the lender’s rights if you default on the terms of the loan, and your rights if the vehicle is repossessed.
Lending money for an auto loan gives the bank or credit union a security interest in the vehicle. If the loan terms are not met, the vehicle can be repossessed from the borrower. The lender may demand full payment of the loan, payment of only past due payments, and payment of repossession charges and storage fees.
The lender and borrower may discuss alternative payment options, such as deferred payments. If any changes are made to the terms of a signed loan agreement, the borrower must get those terms in writing from the lender. For example, if payments have been added to the end of the loan, the lender must show the calculation of any additional funds required to satisfy the loan.
Never rely on a verbal agreement. Any changes to the original terms of an agreement should be in writing.
Seek Legal Assistance
Whether you have fallen behind on your auto loan payments or not, if your vehicle has been repossessed in the past six years, Flitter Milz will evaluate the repossession for potential violation of your consumer rights. Contact Us for a no cost legal evaluation.
