Repossession is the process in which the lender of your vehicle takes the ownership back for lack of payment. The auto lender doesn’t need to warn you or provide the court’s orders regarding the same. It is almost always included in the contract that you signed when purchasing the vehicle. The laws for vehicle repossession are different in each state. By filing bankruptcy, the court will order all collection actions taken against you to stop immediately.
When does repossession occur?
Whenever you find that you are unable to pay the auto payments, it is most likely that your auto lender can take the vehicle back. Sometimes, the lender takes repossession after you miss your first payment. More often than not, though, you will receive warnings that your payments are late. The lender will usually add a late fee to your payments.
The Repossession Types:
Repossession comes in two major types- one is voluntary repossession, and another is involuntary repossession.
- Under the voluntary repossession, you are the one who volunteers to give back your vehicle to the owner when you think you cannot afford the payments that you need to pay every month.
- Under the involuntary repossession, your choice barely matters. In the process, the auto lender cannot disturb either you or your neighbors, yet they can come back to repossess your car at any time.
Whether your auto lender takes back your vehicle with your permission or not, you still owe the balance of due loans existing on your vehicle. To take the money back, either your auto lender will use a third-party collection agency or can opt to send messages and letters to remind you about the money.
Contacting a McAllen bankruptcy attorney can help you figure out how to keep your vehicle if you choose to and stop the repossession process.