Are you close to defaulting on your car loan? Are you worried your lender will repossess your vehicle and try to collect the money you still owe? One of the best forms of action to avoid car repossession is to contact your lender before you miss a payment and inquire about negotiating a settlement of what is owed. You may also want to consider the following four ways to save your vehicle:
If you miss one payment and don’t receive a letter from the creditor regarding default, then you still have time to make the loan current. When you make late payments on your car loan, you need to also pay off any late fees and charges that have accumulated, otherwise, you might default on the loan for not paying the full amount due.
Reinstate the Loan
If you default on your car loan, you might be able to reinstate the loan. By reinstating the loan, you can make up all of your past-due payments in one lump sum. If the lender approves the reinstatement, they can put a stop to the repossession order or return your car if it has already been repossessed. You only get one chance to reinstate a loan, so make sure you don’t default again.
Negotiate With Your Lender
If your lender is flexible, you might be able to negotiate an alternative to repossession. One option you can put on the table is to surrender your vehicle to the lender. If you make this arrangement, the lender might agree to waive or reduce the deficiency. Creditors sometimes like this option instead of repossession because it saves them time and money. If you want to surrender the vehicle, make sure the agreement is in writing and states the amount settled. If you don’t have a written agreement, the lender can still attempt to collect the entire deficiency balance.
File for Bankruptcy
Depending on your financial circumstances, filing for bankruptcy might be the best option to save your car from repossession. When you file for bankruptcy it will temporarily stop the following:
- Vehicle repossessions
- Collection actions on the deficiency balance
- Deficiency judgment lawsuits
- Wage garnishments arising from deficiency judgments
Most people file Chapter 7 or Chapter 13 bankruptcy, but either option will temporarily protect you from collection and repossession.
Do you need help saving your car from repossession? Then call our experienced attorneys at The Buchalter Law Group to schedule your free case evaluation today.