If you are behind on your car payments, you may be searching for ways to avoid repossession. But when can a bank repossess someone’s car? And what can you do about it?
Below, we dispel some common car repossession myths, and explain what you can do to protect your vehicle. To learn more about bankruptcy and car repo, call The Law Offices of Diane Anderson to speak to a Jackson CA bankruptcy attorney today.
Myths About Car Repossession
Even if you’re not behind on your payments, you should be familiar with your rights. Here are some common myths associated with car repossession:
Myth #1: Financial companies and banks must wait until you are three months or more behind on payments to repossess your car.
When can a bank repossess someone’s car? In reality, the bank or financial lender can repossess your vehicle if you are even one day late with a payment. It’s unlikely that the bank will send a repo man if you are a few days late; however, they legally can at any time after that.
If your contract gives you a grace period, then your financial institution may have to wait to repossess your car. Some car buying contracts establish a process that must be followed in order to repossess the car. If this is the case, you should have a better understanding of when can a bank repossess someone’s car.
Myth #2: The financial company will not repossess my vehicle if I make a partial payment.
In most situations, if you are behind at all, the financial institution can repossess your vehicle. Even a partial payment will not save your car. It’s best to talk to your lender about your situation and get them to make a variance in writing. If they agree to not repossess your vehicle for a partial payment, then you should get them to send you that statement in writing.
Myth #3: The financial company may not repossess my car if I call and explain the situation to them.
While it is positive to remain in communication with your lender, they are not likely to change the terms of your agreement with them. If they do, you should get that information in writing. If you do call and explain your situation to the lender, they may offer you other solutions with the goal of avoiding care repossession.
Talk With Your Lender
Although you may want to avoid the situation, you will have to talk to your car lender to determine what should be done in your situation. The sooner you talk to your lender, the better. If you are one payment behind and do not see a change in your financial situation, then you may ask them to change the terms of your agreement. Although they may not want to, when threatened with a possible bankruptcy or the cost of a repossession, they may be more willing.
If you were recently laid off, then you should explain that to the lender. You may state that your unemployment cannot cover all of your expenses, but you will get a new job soon. In some situations, lenders have programs to help buyers who face temporary troubles. You may ask your lender if they have any program that can help on a short term basis.
What to Do If You’re Threatened With Car Repossession
If your car lender threatens to repossess your car, there are steps you can take. First, you should consult with an attorney. Most attorneys will give you a free or low cost consultation to determine your best legal options in your situation. Next, you should evaluate your financial situation. You might make a list of all of your expenditures and see if you have enough income to cover them. If you have a considerable amount of debt that you are paying off, you should consider bankruptcy. You may also consider renegotiating your agreement with your car lender. These considerations can help you if you’re considering what to do if your car is repossessed.
If you cannot afford your current vehicle, you may consider selling it to pay off your remaining loan or trading it in for a cheaper car. If you have paid a significant amount on your loan, then this may be a good option for you. When buying a new car, make sure your payments are smaller than previous ones that you could not afford.
When Can a Bank Repossess Someone’s Car? A Bankruptcy Attorney Can Answer Your Questions
You have options if your financial institution is threatening to repossess your car. Contact a Jackson CA bankruptcy attorney to learn more about how to protect your rights. Call The Law Offices of Diane Anderson today.