How Do I Stop My Car From Being Repossessed

by Thomas Vargo

You don't want your car repossessed and is the last option a credit wants to use in order to recover their money. A repossession will give you a bad credit rating along with being responsible for the repossession cost and for the difference of the car loan and the amount the credit receives after the car is sold at auction.

A car can be repossessed after only one late payment because it is considered default on the loan agreement, but the creditor normally will not exercise this option until the payments are substantially past due. How late just depends on the creditor.

Most states have specific laws concerning car repossessions and these laws can vary from state to state. A vehicle repossession is a civil matter and not criminal. Because it is a civil matter, the lender cannot use law enforcement or police to locate the vehicle. This means the lender cannot report the car stolen. The only way for a creditor to repossess the car is to locate it themselves or use a private party, otherwise known as a "repo man". A creditor or its contracted private party cannot open your garage door in order to locate and repossess the car. However, they can sit and wait until you move the car outside in order to take repossession.

If you are in default on your car loan and are asking yourself "How do I stop my car from being repossessed?", then you have several choices.

The first choice is to contact the creditor and discuss your financial situation. Ask your creditor about their willingness to work with you as you try to get your payments back on track. Ask the creditor if they can reconfigure your car loan. Sometimes your missed payments can be added to the end of a new loan.

The next option is to consider selling the car. Even if by selling the vehicle you won't raise enough cash to pay the full loan off, it will at least be more money then you will receive for the car if it was sold at a auction. If you use this option, it would be a good idea to inform the bank about your plans of selling the car. This may temporarily stop the creditor from repossessing the car. Once the car is sold, and you have paid the creditor the money you received from the sale, the creditor will make arrangements so you can pay off the rest of what you owe them.

The third option that can help you keep your car is to consider filing for bankruptcy, but only if you have considerable debts beyond that of your car. Since filing for bankruptcy will result in bad credit, only choose this option as a last resort.

Lastly, but is not recommended, is to hide your car and not answer creditor phone calls. These evasive tactics may succeed in the short run in order to keep your car and have transportation, but while you're playing this Hide-n-Seek game with your car, your credit will be negatively effected.

It is important to remember to create a plan to get your finances back on track and catch up on your car payments, if you want to keep your car. Take the proper steps necessary for your situation to get your finances stabilized.