Eventually, we all experience some type of financial set back. This might take the form of a job loss, the loss of an income winner or some unforeseen event. And if you’re like most people, this setback may have an impact on your ability to pay for your auto loan. A lack of transportation can have a significantly negative impact on our ability to commute to work, pick up our kids, get groceries , and much more. This loss of income will affect the way we live, but when it effects our ability to commute, the loss can be unbearable. A car repossession takes place after you’ve missed your loan payments or you’ve violated an agreement with the lender. When this happens, the lender of the auto loan can have the car repossessed. As if this wasn’t bad enough, the lender can still sue you for the remaining balance of the loan, even after they sell your vehicle at auction. It’s not uncommon for the vehicle to be sold for thousands of dollars less than the difference between what you owe and the sales amount. The remaining balance owed is referred to as a deficiency. In pursuit of this deficiency, lenders can make your life extremely difficult by placing liens on your property and garnishing your wages. Since a vehicle can be used as collateral for a loan, the lender has a right to repossess the car. When a borrower signs a loan they usually put the car up as security for the debt. This is referred to as a title loan, and it grants the lender a security interest in the car.
Steps to Take to Get Your Vehicle Back
If your vehicle has been possessed, all isn’t lost. Following are a few options that will allow you to get your car back from the lender:
- Hire a repossession attorney.
- File bankruptcy
Other options will allow you to get your car back from the lender. But these options, like reinstating the loan, include having access to credit or huge reserves. Since the car is about to be repossessed or has already has been, these options aren’t realistic. Creditors are required to follow specific procedures with regards to repossessions, auction property, and providing written notifications. If fact, these laws are extremely difficult for lenders to follow to the letter. So many lenders may not be following correct protocol with regards to repossessions. That’s where a repossession attorney can make a huge difference. Repossession attorneys will be able to comb through your notifications and loan agreement to make sure that the lender is in compliance. Additionally, they’ll make sure that your auto sold for a fair price. It can’t be overstated enough that you should keep all documentation and written correspondence with your lender and collection agencies.
Keeping Creditors at Bay with a Bankruptcy
If you’re in the position to have a repossession, there’s probably a larger financial issue that needs to be addressed. You might want to give serious consideration to getting debt relief through bankruptcy. Based on your income and assets, you be able to file either a chapter 7 or a chapter 13 bankruptcy. Both provide debt relief, but the complete elimination of your debt will require participating in a chapter 7 bankruptcy. You’ll need to speak with an experienced bankruptcy attorney to determine your eligibility. With regards to bankruptcy and a repossession, a bankruptcy attorney will be able to stop a repossession, as well as stop your vehicle from being sold at auction. With this option though time is of the essence, and you’ll need to speak with a bankruptcy attorney while you still have options.