Avoiding car repossession can be fairly devastating in a number of ways. If you’ve missed a car payment, it’s important to start considering your options right away. In this section, we will explain 10 tips on how to avoid car repossession.
Avoiding Car Repossession | Here are 10 Great Tips!
Having a car repossessed can be consequential, as most people need a car for everyday use and repossession contributes to the negative information in your credit history.
Car Repossession: If you fall behind on your car payments, the company that financed the purchase of the vehicle is legally entitled to take it back. In order to repossess the vehicle an original court order with the stamp of the court needs to be present. If approached by anyone without a court order, it would be best to scrutinize all documentation very closely. Usually, a sheriff of the court would have to hand over such a court order.
Know your Rights.
For specific information regarding the repossession of your car, how the process works, as well as repossession rights , do the following:
- Find out about the law by contacting a consumer law attorney, research on the net, or contact your municipality.
- Review the details of your car loan agreement.
Get Current or Up to Date with Your Payments
If you can gather up enough money to cover your missed payment(s), you may be able to avoid a repo. Depending on your loan agreement, you may not actually be in default until you are at least 30 days late. Take a close look at your agreement to get an idea about the kind of timeline you have to work with.
Also, if you are planning on making up your late payments, make sure that you’re paying the right amount. If you neglect to add in late fees or any other applicable charges, you may still end up being in default.
Apply for Debt Counselling
Debt Counselling should always be considered as a last resort kind of option. But if your financial troubles extend beyond your car payment, it might be necessary to apply.
The debt counselling application process is easy, free and paperless.
Negotiate with the credit provider.
Call the Creditor/lender or debt collector. If you realize that you can’t make your payment, then you should call the bank and let them know. You should commit to being honest about your financial situation. Tell the person on the other end what you can afford and ask if the loan can be modified.
- Sometimes A 60-month loan, for example, could be stretched out to 72 months. This would lower your monthly payments even though you would end up paying more over the life of the loan. Always get new contract terms in writing.
Sell your car.
Do not hide the car.
It is illegal to hide a car to keep it from being repossessed. For this reason, you are better off calling the creditor as soon as you know you will be late with a payment. If you can make the required payment at a later date, then let them know.
Talk with a consumer law attorney.
Reinstate your car loan.
Buy it back.
By paying back the outstanding amount you can repurchase the car.
Reinstate your car loan.
Agree to resume paying the same installments under the same agreement as before.
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