Most of us depend on our vehicles for a variety of different things. Many places do not even have mass transit, and taxi service can be expensive and unreliable to depend on for every-day transportation. Often the care of our family and our ability to get to our jobs are dependent on having a working automobile upon which to depend. For that reason, it is important to act if you find yourself up against the wall when it comes to maintaining your car payments, before auto repossession is imminent.
There are many things you to think about if you are behind on your car payments. Consider these:
- What is the law in regards to the repossession of a personal vehicle?
- Is there a way to avoid repossession?
- What is the difference in voluntary repossession and physical repossession?
What is the law in regards to the repossession of a personal vehicle?
The laws in regards to auto repossession will vary from state to state depending on state law and the contract you signed with the seller or financer of the vehicle. Repossession of a personal vehicle is a civil matter, rather than a criminal matter, in the eyes of the law, so law enforcement officials cannot be involved in a repossession effort unless a law is broken in the attempt.
Is there a way to avoid repossession?
- There are ways to avoid auto repossession, but the first, and least likely, to occur is that you either catch up on the payments you owe or pay off your vehicle in a single lump sum payment. Obviously, you would most likely not gotten behind in your payments had you had the ability to pay off your vehicle, but if you can do this, you may certainly avoid repossession.
- You can enter into negotiations with your financer as soon as you recognize you are going to have a problem making your regular payments, and there is a good possibility that you can get your payments lowered or temporarily suspended until you are back on your feet. The key here is to act before you are behind, and be the one to initiate the contact rather than waiting until the financer has to contact you.
- You can seek a loan to pay off your vehicle from a third-party lender. Of course when you refinance your car, you will still have payments to make, but you can often negotiate a lower interest and payment amount to make it a win/win situation for everyone concerned.
- You can declare a chapter 13 bankruptcy. Once you have declared chapter 13, your vehicle must be returned to you even if it has been repossessed.
- If you are a home owner with home equity, you can apply for a cash back loan, refinancing your home for a longer period of time and getting your applicable equity back in cash to use to pay off your car.
What is the difference in voluntary repossession and physical repossession?
Physical repossession is the lender or a repossession agent coming to physically take possession of the vehicle. Voluntary repossession is the agent letting you know your car is about to be repossessed or you realizing you won’t be able to pay for the vehicle and voluntarily returning it to the dealer.
So, if you have gotten upside down on your auto payments, there are options available to you. Why wait, use the easy online tools available to you and check out your options today.