Car Repossession

Your debts can be unsecured or secured.  Secured debts usually are tied to an asset, like your car for an auto loan, or your house for a mortgage.  If you stop making these payments, lenders can repossess your car or file foreclosure proceedings  on your house.  Unsecured debts are not tied to any asset, and include most credit card debt, bills for medical care, signature loans and debts for other types of services.

Most automobile financing agreements allow a creditor to repossess your car any time you’re in default.  Usually, no notice is required.  If your car is repossessed, you may have to pay either all past-due payments, or the full balance due on the loan, as well as towing and storage costs, to get it back.  You are entitled to a detailed letter stating the amount due and location of your vehicle. If you can’t pay all that is due, the creditor may sell the vehicle at auction.  If you see repossession approaching, you may choose to sell the car yourself and pay off the debt.  You’ll avoid the added costs of repossession and a negative entry on your credit report.

Most lenders are willing to work with you if they believe you’re acting in good faith and the situation is temporary.  Some lenders may reduce or suspend your payments for a short time.  When you resume regular payments, though, you may have to pay an additional amount toward the past due total.   Other lenders may agree to change the terms of the loan by extending the repayment period to reduce the monthly debt.  Ask whether additional fees would be assessed for these changes, and calculate how much they total in the long term.  Whatever agreement you make with your lender, be sure to get all the terms IN WRITING.

Consumers – whether they are behind in a vehicle payment or not – are entitled to be free from unwarranted or unreasonable repossession tactics by banks, other auto finance companies and repossessors.  State laws provide detailed rules for lenders who wish to repossess a vehicle – rules relating to who can repossess and when, the timing and content of the notice of repossession, the commercial reasonability of a post-repossession sale, and the calculation of any delinquency.  Often, these rules are overlooked.  Further, an improper repossession can be the basis of a lawsuit under state and federal credit reporting, debt collection, or unfair trade practice laws, yielding significant recovery.

If you or a friend has a car that has been repossessed, CONTACT US. We will evaluate the details of your repossession and determine whether your rights have been violated or not.