What happens if the bank repossess your car
If your car loan lender repossessed your car, van, truck, motorcycle, or other vehicle and you want it back, you'll have to act quickly. You may: redeem the car or reinstate the loan if allowed in your state or by contract wait until the sale and attempt to bid on the vehicle at auction, or negotiate with the lender to try to get the car back.
Time Period to Redeem the Vehicle You can usually redeem the car at any time prior to the private sale or auction. Talk to a Bankruptcy Lawyer Need professional help? Start here. Practice Area Please select Zip Code. How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you. Related Products More. Chapter 13 Bankruptcy.
How to File for Chapter 7 Bankruptcy. The New Bankruptcy. Until you completely pay off the loan on your car, your lender is the legal owner of the car. If you are not able to repay the loan, one of the best ways out may be to surrender your car to the lender.
If you stop making payments, the lender may repossess your car. However, in some situations, the lender chooses not to repossess the car. This can happen in a situation where the cost to repossess, repair and resell the car is not worth it to the lender.
This can be a frustrating situation, but there are a few things you may be able to do. If you want to surrender the car as is common in bankruptcy , it is possible that the lender refuses to take possession. In addition to cars and trucks, this can also happen with motorcycles, ATVs, jet skis and recreational vehicles. Enough people are surrendering these types of vehicles that the resale value can be low. If it is too low, the lender might not want to waste resources to repossess, refurbish and resell.
Lenders are not required by law to give you the title if you file bankruptcy and stop making payments, even after an unreasonable period of time and the lender does not repossess the vehicle.
One day, the lender or some collection agency may determine it is worthwhile to pick up the vehicle. Until that happens, keep the vehicle registered and maintain proper insurance. With this option, you might be able to keep and drive the car for many more years without receiving the legal title to it. Another option is to park the vehicle in a secure, public location and send a copy of the keys via registered mail to the creditor. Again, you will want to keep your car insurance current until you confirm that the lender has repossessed the car.
The risk for you here is that you will need to confirm that the car eventually was picked up by the proper entity. Here are five steps you can take to recover from a repossession:. Ask why your car was repossessed. Find out if you can get it back. Know your rights. If the car is sold, ask if you still owe money. Work on improving your credit.
In some states, not getting insurance stipulated in a loan or lease contract can count as a default, and your car can be repoed because of it. Call your lender before jumping to conclusions so you can clarify how you can set things straight. Readers also ask. In a voluntary repossession, you inform your lender you can no longer make payments and intend to return the vehicle.
Just as with involuntary repossession, you have to pay the difference between what the car sold for and what you owed on the loan. Voluntary repossession, a type of loan default, will stay on your credit report for seven years. That type of negative mark will harm your scores — especially your automotive-specific credit scores, which will determine the interest rate you pay on your next car loan.
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Free Articles. Bankruptcy Tool. Filing Guide. In a Nutshell This article provides an overview of the auto repossession process. Join Expert Community. Written By:. Continue reading and learning! Should I File Chapter 7 Bankruptcy? By the Upsolve Team. By Attorney John Coble. Chapter 7 vs. Chapter 13 Bankruptcy By the Upsolve Team.