When you stop making payments to your car finance company they may repossess your car. Cars are normally bought with a loan. Buying on credit allows many low income earners to buy a car. Most Americans have a car, because they need it to come round. Some individuals stop paying installments because they have fallen on hard times. The creditor has the right to repossess the car in some states and depending on your sale agreement with creditor. Some people don’t know that.
The repossession of your car can be prevented. Know your rights by reading your sales agreement and consulting your attorney. The creditor can not just walk over you in repossessing your car. Make sure you have all your contract handy to protect you against unlawful repossession.
You are a liability to the creditor if you stop making payments to your loan. Remember that you can talk to your creditor. There is a repayment contract in place, but the creditor may decide to help you and change the terms. As soon as the creditors does that the original contract is not applicable and not valid anymore.
During car repossessions, there are certain rules which creditors must abide with. Creditors are required to seize a vehicle without force, threats or physical violence. They are also not allowed to remove your car from a garage without permission. If any of these things happen, you have a right to claim damages. In this case, the creditor will be charged with disturbing the peace. This breach of peace violation differs from one state to another. If the Creditor is found guilty he or she may be ordered to pay a penalty. If any harm or damage has been done to you or your property, the creditor will be ordered to pay. In some cases, you may win the right not to pay the outstanding amount you owe. This is called the deficiency judgement. A creditor found guilty of breaching the peace may forfeit his right to collect the outstanding money owed. Again you must consult your attorney or legal agency to give you advice.
If your car is repossessed the creditor will sell your car on auction to get their loan money back. The creditor must give you the details of the date and place of the sale.
During car repossession, you have two options to redeem the car. You can either pay the outstanding amount or pay the full amount plus interest. How you redeem your car will depend on your state laws. The cost of interest for repossessing the car includes expenses for late payments, repossession, safe-keeping, and re-conditioning the car for sale.
The creditor may not sell your car for an unrelated market price. the creditor must do an appraisal of the car before the auction. If the car is sold well below this amount, the creditor will be liable or the repossession can be reversed.
Car owners should check if any personal property is damaged or missing during car repossession. The creditor is required to account for all personal items in your car. If any items have gone missing or damaged, you have a right to claim compensation.
There might be a deficiency payment after the sale of the car. A deficiency payment is when there is a difference between the sale price of the car and the amount outstanding on the loan. The creditor may sue you for this amount or you can come to an agreement with the creditor to repay this amount.
Car repossessions may lead you to court. You must attend the court hearing when you receive a notice from the court messenger. You will be dragged to court for deficiency judgement. You will be surely found in default of payment, and your only defense is to make counter-claims if any. The only claim you can make is breach of peace during vehicle repossession. On these grounds, the deficiency judgement can be annulled.
When you are facing repossession of your car do not hide it from creditor. This is a criminal offense and you can go to jail for that. Consider voluntary surrender of your car if you cannot meet the repayments of your car. Seek legal advice when you believe the creditor has acted outside the law when they repossessed your car.
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MLA Style Citation:
Brazendale, Colin "What To Do When Your Car Is Repossessed." What To Do When Your Car Is Repossessed. 2 Jul. 2010. uberarticles.com. 12 Sep 2014 <http://uberarticles.com/finance/personal-finance/what-to-do-when-your-car-is-repossessed/>.
APA Style Citation:
Brazendale, C (2010, July 2). What To Do When Your Car Is Repossessed. Retrieved September 12, 2014, from http://uberarticles.com/finance/personal-finance/what-to-do-when-your-car-is-repossessed/
Chicago Style Citation:
Brazendale, Colin "What To Do When Your Car Is Repossessed" uberarticles.com. http://uberarticles.com/finance/personal-finance/what-to-do-when-your-car-is-repossessed/
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