How To Get Back A Car In Repossession

February 21, 2023

Did you know that your car can be repossessed for reasons other than failure to pay? It’s one of the most disturbing things that can happen to you. You may wonder about car financing with repossession on your record and about losing all the money you paid on your current vehicle. You have a couple of choices. First, you can pay back the past due amount and any applicable fees to reinstate the loan. Second, you can allow the lender to continue the repossession process and sell the car at auction.

Find Out The Details Of The Repossession

However, if you are concerned about an auto loan after repo, you should be. Most lenders won’t even look at your application when they see this even on your credit report. You must act quickly because you need to get to work and your need for a car is imperative. Make sure you find out exactly why your car was taken and how much you owe. Some states allow a repossession to occur if a person fails to have insurance as it’s a stipulation of the contract.

You don’t want to jump to conclusions. Call the lender and get a detailed list of expenses and find out what you need to pay to get the car back. Some lenders will require the loan to be paid in full along with the costs they incurred during repossession. Other lenders will allow you to work out a new payment plan. Keep in mind that once your car has been repossessed, it will probably stay on your credit whether you work out a deal or not.

Should You Reaffirm The Loan or Let it Go?

What caused you to get into the situation that you are in? Can you afford the insurance and upkeep of this vehicle and stay current with your payments? If you cannot afford these costs, then it is best that you allow them to proceed with the process and sell the car at auction. Remember, getting an auto loan after repo can be hard, but some lenders specialize in helping people who have challenged credit.

If you are going to file for bankruptcy, you should file before your car is sold. There is a chance that your bankruptcy lawyer can help you work out a plan to save the car. Based on the bankruptcy, you are filing, chapter 7 or 12, you can reorganize the debt. You should know that even if you fell behind in your payments, you have rights. Make sure that they are following the law when it comes to your repossession. Ask yourself if you can honestly afford this car before you make a deal to get it back.

Know Your Rights During the Process

You should receive a notice that told you that you were in breach of contract and that they intended to take the vehicle. The demand letter should have detailed your costs and what you needed to pay to keep the automobile. They must also notify you of the time and date of the auto auction. You can repurchase your car at the sale if you so choose.

Any amount not recovered during the sale will be your responsibility to pay. For instance, if the total amount owed is $8,725 and they sell the car for $2,200, then you are responsible for paying the deficiency balance of $6,525. Filing bankruptcy is the only way to keep from paying this amount. The lender can attach your wages and assets to recover their money.

Rebuilding and Moving on

Though it seems like the end of the world, you can obtain car financing with repossession on your credit report. While you won’t get the best interest rates, you can still get financing through alternative lenders. It’s best to work on rebuilding your credit and moving forward after this financial setback. Take comfort in knowing that you are not the only one who has been through this, and you will recover.