Vehicle Repossessions and Bankruptcy

: Reese Baker & Associates

  Filed under: Automobile

A vehicle payment is the most common type of consumer secured debt. Having easy access to a vehicle is essential for most of us to get to our jobs, schools, doctors appointments, grocery store, etc. We often pay for this convenience in the form of a car payment. When we get behind in the vehicle payments, the lender has the right to repossess the vehicle, in some cases after one missed payment, although that rarely happens. A Hildago County bankruptcy attorney can stop the legal process against you and help you decide your best course of action.

Repossession Relatively Easy Process

It’s quicker and more accessible for a lender to repossess a vehicle then it is for mortgage companies to foreclose on your home, or credit card companies to threaten you with legal action.

Responsible for Insuring Vehicle

Some states require you to maintain adequate vehicle insurance also. If you fall behind and lose coverage of your vehicle while making payments to the loan company, they can also legally take your car.

After the first missed payment, you will usually receive a phone call or letter reminding you to make a payment and possibly including a late fee. If you do not catch up on the payments, the lender may take action, day or night to come onto your property and take the vehicle.

Your Protection

The lender, or third party acting on behalf of the lender, is not allowed to enter your closed garage without your permission, they are not allowed to threaten you or use force. If the lender violates any of these laws, you have the right to seek legal damages. Any personal property inside your vehicle at the time of the seizure is still your property. The lender must make every effort to protect your belongings and let you know where you can come and retrieve it.

If you choose not to pay the arrears and repossession costs, the lender can decide if he wants to keep the repossessed vehicle instead of payment or sell it. The lender is required by law to notify you when and where your vehicle will be sold at auction. You can bid on the car if you choose. The sale must be ”commercially reasonable” and not sold far below the fair market price. If the lender does not sell the vehicle at a fair price, you may be able to claim damages against the lender and dispute a deficiency judgment whereas you would be responsible for the remaining balance of the loan.

If you are behind in your vehicle payments and worried your car could be repossessed at any time, contact a Hildago County bankruptcy lawyer to stop any legal action being taken against you. The bankruptcy process will give you time to review your options.