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.
If you’ve explored all of these options with no luck, and repossession seems like a sure thing, here are some tips:
- 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 that you must keep in the car, like jumper cables, child seats, flashlights, tools, etc. Or better yet, take pictures or video;
- You don’t have to consent to the repo man entering your house or garage. But never use violence against the repo man. Keeping your car isn’t worth risking a violent or dangerous confrontation.
- Even if the lender is legally entitled to seize your car, the repo man can’t use violence or the threat of violence during the repossession. It’s also illegal for the repo agent to break into a locked garage or to use the police to aid in the repossession. If any of these things happen during the repossession, you should discuss the situation immediately with an attorney.
Most of these suggestions will take a while to work out, so consider keeping your car in a locked garage while you work out the details. Before you do, though, read this post because there may be criminal penalties for fraudulently concealing your vehicle if the lender is legally entitled to repossess it. You should also be proactive and discuss your situation with an attorney. Don’t wait until the repo man is knocking on your door to act, because at that point, it’s going to be very difficult for an attorney to prevent the repossession.
If you’re facing repossession and want to discuss your legal rights with an attorney experienced in vehicle repossession cases, feel free to contact me. I offer 30 minute consultations for $175 and can help you figure out the best course of action for your situation.