Do I Need a Lawyer If My Car Has Been Repossessed?

Based on the agreement details and the law in your state, the lender may reclaim the vehicle without a court case if you don’t meet your obligations, such as not making scheduled payments or not maintaining car insurance. Retaking the vehicle is often called “repossession”, with each state defining its rules.

If your vehicle – a car, van, motorcycle, or SUV – has been repossessed by your lender, evaluate your options and decide whether procuring a lawyer to help you is financially sensible.

Assess If It’s Possible to Retrieve Your Car

Usually, before auctioning your car, the loan provider often gives you a chance to reclaim it by settling any overdue payments or paying off the loan entirely. If someone in your family or a friend can give you a personal loan to cover the due balance, it could make retrieving your car and getting back on the road less complicated.

If you find it impossible to repay the whole loan, many lenders are generally open to reinstating the loan and modifying the repayment schedule or the monthly payment amount. Your lender might likely agree to establish a fresh payment arrangement to enable you to recover from your delayed payments.

Consider Filing a Lawsuit if the Repossession was Unlawful

Car lenders must adhere to specific procedures and legal requirements when carrying out a repossession. A key part of this process involves sending a written notice at least 21 days before the repossession, stating the amount due to update the loan and avoid repossession. 

However, it’s important to note that if you’ve defaulted on payments before and received this notice, lenders are only obligated to send it thrice. If this is your fourth instance of defaulting, you may not be entitled to this notification.

During the repossession process, lenders are prohibited from disturbing the peace. After a repossession, if the vehicle is resold, it must be done commercially reasonably. These are just a few of the many stipulations.

You could consult Virginia Beach Law Group to file a lawsuit if you believe your vehicle was repossessed unlawfully. Regrettably, in many instances, a lawsuit might not assist in retrieving the vehicle immediately. Obtaining a court order is necessary to regain possession of a repossessed vehicle through a lawsuit. Generally, even under the most severe circumstances, courts may hesitate to provide such relief.

Is it Possible for You to Recover It?

Once a repossession has occurred, the lender is responsible for issuing written notifications to the borrower. In several instances, the financial entity, whether a bank or credit union, might necessitate that the borrower settles the loan entirely (including repossession and storage fees) if they wish to reclaim their vehicle. 

Alternatively, they might permit the borrower to make good on overdue payments to restore the loan. If the borrower cannot fulfil these conditions, the lender will initiate measures to sell the vehicle.

The Impact of Repossession on Your Credit Reports

Car repossessions can remain on your credit reports for 7.5 years from the initial default date. They not only lower your credit score, but they can also influence existing accounts by raising interest rates or decreasing the credit available to you.

Repossessions could also contribute to a bank’s decision to reject an application for new credit like a mortgage, car loan, or credit card. They might even prevent an employer from recruiting or promoting you, or stop a landlord from giving the go-ahead for your new home application.

Stay Safe By Understanding Your Rights

When discussing with a repossession lawyer, inquire about your legal protections too. For example, if your vehicle is at risk of repossession and secured in your garage, the repossession crew does not have the authority to enter your premises to seize your car forcibly.

Additionally, it’s vital to understand that only your vehicle can be repossessed. Any other personal belongings should be returned to you. These are merely a few of the rights you possess. Don’t hesitate to contact a consumer rights attorney if you believe your rights were infringed during repossession.

Endnote

Frequently, individuals who have experienced a car repossession may feel overwhelmed and lost about where to seek assistance. Should you believe that your rights were infringed upon by either the lender or the repossession agent and wish to avoid bankruptcy, consider contacting a seasoned consumer protection law firm.