Lenders can take your vehicle away if you default on your monthly payments or take out a loan to purchase a vehicle. The typical timeframe for repossession is between 45 and 75 days of delinquency. There are many ways you can keep your vehicle safe.
Options for Stopping Vehicle Repossession
There are several ways to stop the repossession of your vehicle depending on the circumstances.
- Filing bankruptcy – Banning your vehicle and collecting other debts is possible by filing for bankruptcy. You can file for Chapter 7 bankruptcy or Chapter 13 bankruptcy depending on your particular circumstances. You can have a bankruptcy lawyer help you understand the impact each option has on your vehicle loan. If you want to keep the vehicle, then chapter 13 would be the best choice. You will only get limited protection if you want to keep a vehicle that is in Chapter 7 bankruptcy.
- Making your payments on time – It depends on the terms of the loan. You may not be in default unless the creditor informs you in writing. By paying any late fees and debt, you can make up for the missed payments.
- Redeeming the car – You can redeem your car if it has been repossessed. You will have to repay all outstanding vehicle loans. This may not be possible. You won’t be able to pay your monthly bills if you don’t have the funds.
- Negotiating with the lender – You can also negotiate with your lender to reduce or eliminate your debt without repossession. You can also voluntarily surrender the vehicle (also known as voluntary repossession) and try to reduce future liability. To pay off the loan, you could also sell your vehicle.
- Refinance or modify the terms of an existing loan – If you are paying too much, you might be able to negotiate a loan modification. You could also try to refinance the loan with a different lender who offers better terms.
This article was written by Alla Tenina. Alla is one of the best tax attorneys in Orange County CA and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.