Do Not Fall Victim To Car Repossession
Car Repossession – Failure to pay on your car loan can cause a bank or lender to repossess your car and then go after you for the deficiency. Even though there are a few ways of avoiding car repossession, not all alternatives may be correct for you. You have to carefully look at each and discover what will work for you. Fortunately, we’re here to assist you. From resolving the debt to shielding yourself against a deficiency judgment, we’ll explain most of the alternatives you have to avoid car repossession.
Make Late Payments
Being behind on payments doesn’t make you automatically in default. Some contracts may state that you’re in default if you’re behind with the payment by just one day, while some others might give you a timeframe of as much as 30 days. If you’re not yet in default, you can avoid repossession by bringing the loan up to date and paying for it all along with all pertinent late fees and charges.
Reinstate the Loan
Even when you’re in default, you may have the alternative to reinstate the loan. Doing so will put off car repossession, or if the car has by now been repossessed, get it back. With reinstatement you’re in essence bringing the loan up to date by paying all past due payments including all of the late fees and charges in one sum. Remember that in most situations you can only reinstate the loan once. If you need to default yet again this might no longer be a valid option.
Redeem the Car
Once the car has been repossessed, in most situations you have the right of redemption. This merely means that if you pay the entire balance on the auto loan, you will get the vehicle back. Be cautious though, because the release amount usually includes the repo fees, storage costs and attorney fees in addition to the usual outstanding principal and interest on the loan itself. The negative aspect is that redemption isn’t that reasonable of a choice. If you couldn’t come up with the money to make the payments in the first place, then you probably can’t pay off the loan either.
Refinance the Car Loan
If the creditor doesn’t offer it, you can make the suggestion for refinancing the car loan. It will almost certainly be for a longer term and you may require finding another lender prepared to extend your credit, but it’s an appealing option. Just make sure to keep an eye out on the finance charges and reflect on value depreciation. Cars decrease in value quickly, so formulate some calculations to determine if you’ll in fact come off better at the end, not worse.
Bankruptcy
It is counterintuitive, but filing for bankruptcy will impede all repossessions, collection actions and deficiency judgment lawsuits. There are two bankruptcy options you can file: Chapter 7 or Chapter 13. Both will put a stop to immediate vehicle repossession, but will not let you to maintain your automobile without some stipulation for payment.