What to do if your car is about to be repossessed

If you’ve missed a few payments on your auto loan and are concerned about the lender repossessing your car, here are some options to consider that may allow you to either keep you car, or lessen the impact on your finances:

• Can you re-finance the loan so that you can better afford the payments? Credit unions usually offer better rates than more conventional auto lenders.
• Can you sell the car to a private party and get enough cash back to repay the loan?
• Will the creditor negotiate waiving any deficiency balance or a less damaging mark on your credit if you voluntarily surrender the vehicle to them? If so, make sure you get that promise in writing. You may want to talk to a lawyer before voluntarily turning over your vehicle to make sure you do not have any defenses to the repossession.
• Is filing bankruptcy an option? If so, consider discussing your situation with a bankruptcy lawyer.

These options can take a while to finalize, so consider keeping your car in a locked garage while you work out the details. But if you’ve explored all of these options with no luck, and repossession seems like a sure thing, here are some things you should do:

• Keep all letters and documents related to the repossession, including the envelopes;
• Remove any non-essential personal property from your car (don’t forget the glovebox and trunk). Make a detailed list of any things you must keep in the car, like jumper cables, flashlights, tools, etc. Or better yet, take pictures or video;
• You do not have to consent to the repo man entering your house or garage. If the repo man does not listen, call the police. Never use violence against the repo man. Ever.

You might also consider talking to a lawyer that handles repossession cases to find out if you have any defenses to the repossession. Creditors are required to follow a strict process before repossession, and they sometimes make mistakes that could allow you to keep your car.