One of the most unfortunate consequences of having a significant amount of debt is the threat of repossession. If you are behind on your car payments, it is likely at some point you will receive a notice that your lender is moving to repossess your vehicle. This is a significant threat because if you do not have your personal vehicle, it could limit your ability to work and make your financial situation worse.
It can be stressful and overwhelming to get phone calls and letters from creditors and lenders about past due balances. You may feel hopeless and unsure if there is anything you can do to limit the damage, keep your car and eventually secure a better financial future, but there are options available to you. It could be in the interests of Texas readers to understand more about the repossession process and how to deal with their debt.
What happens during repossession?
When you signed your car loan, you may not have read every single word in your contract. You likely agreed to terms that outline how the lender can move forward to repossess your vehicle, perhaps after even just one missed payment. It may come as a shock to you to learn that it is possible for a party to come and simply take your vehicle – but it can happen. The repossession process follows these steps:
- When an account is delinquent, the creditor can then contact a third party to assist with the repossession process.
- The repossession company will take your vehicle, and it is likely the creditor will opt to sell your vehicle in order to cover the loan and pay any fees.
- The creditor does not need a court order to initiate this process, but a third party cannot breach the peace or break any laws in efforts to repossess your vehicle.
One way that you can fight back is to know your rights. No matter how much debt you have or how far behind you may be on your payments, you still have rights. Creditors cannot harass, threaten you with physical harm or reveal private information to third parties.
Another way you can fight back against the threat of repossession is to file for bankruptcy. This will enact the automatic stay, which will halt any action against you from creditors, including repossession efforts. Bankruptcy can provide you with protection and an organized way to effectively deal with various types of debt.