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What to Do When Your Car Is Wrongfully Repossessed

Newsweek AMPLIFY - What to do When

Everyone wants to own a car and move around as they wish without having to depend on public transport. It is very stressful when the car that you have been relying on, is repossessed for one reason or another, especially after making timely, regular payments.

Increased instances of repossessions have been observed in recent years. Some of these repossession occurrences are in fact, wrongful repossession. Wrongful repossession is when the collateral you put up for your loan is taken back by the lien holder, either illegally or by mistake.

Repossessions are matters between the borrower and the lender, and they are strictly private. Repossessors should respect your right to your privacy and not repossess your car from your private property without legal authority. When they do, they should demonstrate proper conduct and not use threats or trickery.

If you been meeting all agreed terms made with the lender and your car was repossessed, avail all your payment receipts before you contact the lender. Additionally, you can contact lawyers to advise you on the next step to take.

Many states allow institutions that lend you money to have a security interest in the vehicle. This means that in the circumstances you are unable to pay, they can go to court and take back the car. At times they can do it without a court order. That does not include when you are in default. Default means late or short payments unless the contract dictates otherwise.

When Is Notice Required?

Lenders often give notice of default before attempting to repossess your car. Repossession can only take place because of a default, and the procedure and consequences of repossession are outlined in the contract.

The contract says something cannot be changed unless it is done in writing and signed by both parties. Many distant communications give a false sense of security. They tell you your car isn't going to be repossessed. That verbal guarantee means nothing because the contract says otherwise.

The Process of Getting Back Your Vehicle After a Repo

Sometimes, you might need help from a lawyer to get your car back or go it alone. It all depends on circumstances upon repossession. The lender will probably (not a must) send you a letter informing you about your right to redeem or reinstate.

The letter will include the necessary steps you should follow if you'd like to go by either of these options. In case you don't get the letter, contact the lender to find out the steps you should follow to get your vehicle back.

Don't forget to ask for a statement that contains a breakdown of what you owe and the payment plan. If you choose these options, then act fast because the period for reinstating or redeeming is short. You can use either of these straight forward options to get your vehicle back:

  • Redeem your loan - Redeeming auto loan is allowed in many states to get the vehicle back. However, you'll have to pay the full loan balance, plus any extra cost, which may include late fees, repair expenses, collection costs, storage fees, repossession costs, missed payments, additional fees, and others. This option is hardly used since the majority of people who have fallen victim aren't able to raise enough money to pay off the full loan at once. Full payments give you your car back.
  • Reinstating the loan - This is much common than redeeming. This means you pay the past-due amounts plus any other possible costs. Upon reinstatement, the vehicle will be returned to you, and you resume making regular payments as before. Some lenders don't allow reinstating. Additionally, it's unavailable in some states. To use this option, you must be living in a state that allows it, or it must be written in your contract.

When You Should Consider Getting a Lawyer

Sometimes repossession is unlawful, whether wrongful or right. If your vehicle was illegally taken from your possession, then getting a lawyer might be of great help. A genuine lawyer can tell you if the repossession was unlawful or not. He will then raise the complaint either to the lender or by file a lawsuit in court to make sure you get your vehicle back. If you can't make the payments when you get your car back, then it is a waste of money and time to hire a lawyer to help you secure your car back because you will lose it again sooner or later.

Instances When Your Car Is Wrongfully Repossessed

Violation of laws happens when repossession occurs illegally.

Repossession should follow specific guidelines and procedures. Otherwise, it leads to disputes between repo man and borrower.

  • If the agent breaches the peace when repossessing your vehicle - If repossession agents violate the peace, the lender loses its right to repossess your car at that time lawfully. In such instances, the agent might be required to return your vehicle and pay any caused damages. In the repossession context, certain guidelines should be followed when taking your car. Agents cannot threaten you, can't kick your door in when there are no trespassing signs up, use violence in any way, shape or form, or damage your personal property, touch or harm anyone, repossess the vehicle after you have instructed the repossession agent not to break any lock or gate, have the police present unless the finance company has a judgment against you among other things.
  • When your payment was late but this wasn't a problem before - In situations where lender agreed on changes in payment dates, the original contract terms might no longer be applicable.
  • Missing personal items - The lender must return all personal properties that were inside your vehicle; otherwise, if the lender refuses to cooperate, you might have a claim against him.
  • When it was due to a lack of insurance, but you had coverage - The lender can't take your vehicle if your insurance coverage didn't lapse.
  • You're current on payments - Mistakes sometimes resurface. It may be due to various reasons which may include;

1. A paperwork inaccuracy or computer glitch.

2. A Change in car insurance providers, but the lender was never informed of this change. To them, it just looks like your vehicle is no longer under any coverage.

3. The repossessor has simply gone after the wrong car.

What Repossession Does to the Status of Your Credit Score

Repossession indeed poses negative impacts on your credit score and it can grossly taint it. When your car is repossessed, your credit score goes down. It may be drastic or gradual, but the thing is that it drops.

Percentage drop may depend on where your credit originally stood. Generally, the higher credit scores the larger the drop. If repo has already negatively impacted your credit score, but you need to improve it, we can help you recover.

Three Ways Repossession Could Hurt Your Credit

Loan default: Loan default means you failed to honor the agreement of the loan. If your payment is late by 30 days, you may be considered a defaulter. Bearing the fact that repossession is a hassle, the lender may not consider you in default until 90 to 120 days of late payments.

Otherwise, the lender should be more lenient if you have a good payment history. A defaulted vehicle loan will show on your credit score for a good seven years from the day of a missed payment.

Late payments: Any payment you make at least 30 days late drops your credit score. If you miss consequent payments, your credit reports will show both a 30-day late notice and a 60-day late notice. Repossession is stressful, and banks tend to show a bit of leniency when it comes to payments.

Repossession: Lenders generally repossess your vehicle not earlier than 60 days after you miss a payment. Most likely it will happen after 60 to 120 days of late payments – depending on the terms of the lender, repossession team, and contract terms of the loan. Generally, repossession adds its mark on your credit reports which stay affected even before repossession occurs and it can damage your score by more than 100 points

Repossession drops your credit score. Always put in place all necessary measures to prevent one from taking place. Negotiate with your lender, explain what has turned the situation as it is, and see if the lender can help. Put in order all receipts of all your payments. If you face repossession, put on paper any occurrences of breaching the peace.

Conclusion

If you want to get assistance on your unique issue, reach out to Credit Agenda who can help fight the wrong repo. Our services don't put you under any obligation. Let us demonstrate to you how easy it is to get you back on the road. Whether your credit has worsened after car repossession, or you have mismanaged your finances, it's not our duty to judge.

We believe in second chances and specialize in assisting customers with bad credit, do you need help? Know how to get your car back now.

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