How to Deal With Car Repossessions

Behind on payments? Cosigned for a friend? Avoiding mail from your car lender? It’s a sticky situation to be in if you can no longer afford to pay your auto loan. Thousands of americans are at risk of losing their vehicles every year and many of those people take little or no action to protect themselves from their oncoming financial doom. If your car is in the danger of repossession or has already been repoed, here are some tips that may be able to help you.

If you are behind on payments

The first thing you can do is contact the lender. Any life changing event like a medical condition or sudden loss of employment can affect your ability to pay make payments on time. In some cases, lenders may be willing to work with you by moving those payments to a later date or even at the end of the loan. If being able to afford the car is no longer a possibly, you may want to consider a voluntary repossession, in which you can attempt to return the vehicle in exchange for the balance of the loan. If you are financing the vehicle, and its value is worth more than the balance on the loan, you may be able to consider selling the vehicle to do away with the loan all together.

If the vehicle has been repossessed

Your options may be limited, but you may have a chance to lessen the blow. After repossessing the vehicle, most lenders may try to sell the car in auction and charge you for the remaining balances of the loan. If you’re lucky, they may be able to sell it for more than the amount you owed on it and alleviate you of any debt. If this is not the case, you may try to negotiate a payment plan. If they have not yet sold the vehicle, you may be able to regain possession by paying a lump sum amount or see if they are willing to modify the loan.

If you cosigned on a vehicle

Your main goal, if possible, should be to clear yourself from the debt. This may or may not be possible depending on the loan provider, the primary loanee and many other factors. With any legal implications, it may be wise to seek an attorney for advice on how to remove yourself from the loan. In any case of fraudulent activity, is it important to alert the major credit bureaus and to file a report with the Federal Trade Commission.

Maintaining a strong budget may be a great way to remain financial secure, however, no one knows what will happen in the future. Losing a vehicle can be detrimental to a family’s well being, especially in cases of repossession. By following these tips and contacting the loan providers, many people have been able to fix their loan problems and keep a good relationship with their lenders. If you are in a position where you are completely unable to overcome your debt, you may want to consider speaking with a legal representative regarding bankruptcy and credit counseling.