If you happen to fall on hard times or find that you are unable to make regular payments on your loan, a repossession can occur — moreover, the sudden and unexpected seizing of one’s vehicle or home.
If you find yourself in this difficult situation, you may have dozens of questions about the process. We’re here to help answer those.
In today’s post, Groce & DeArmon will cover the most commonly asked questions regarding repossession.
What is repossession?
This occurs when someone is delinquent on paying a loan for a property. Repossession of a house is called foreclosure. Whereas, the most common form of repossession comes about due to missed car payments.
Should I pay off a repossession?
Yes. Paying it off immediately reduces the debt owed and helps your credit score.
If my car is repossessed, do I have to pay off the entire loan?
In most states, including Missouri, this is the case. But it can vary state by state.
Can you recover from a repo?
Inquire into why your car was repossessed. Find out ways you can get it back. If it’s sold, see if you still owe money. Work on repairing and improving your credit score.
Does a repossession affect a cosigner?
Yes. The credit score for the primary borrower and cosigner is affected. A repossession can stay on the cosigner’s credit report for up to seven years.
What is voluntary repossession?
This is when a borrower directly informs the lender that they can no longer make payments and would like to give the car back. The creditor resells the vehicle and you receive a statement explaining the details of the sale. You pay the deficiency amount, which is the difference between what the car sold for and what your loan principal.
What is a deficiency balance?
When your vehicle is repossessed, the deficiency balance is the amount of the original loan that is unpaid after the lender has taken possession of the property and sold it to recover the loan balance.
How do I deal with deficiency?
If you feel what you’re paying is unfair, you can negotiate a payment plan with your lender, settle for a deficiency payment less than the amount you owe or file for bankruptcy to wipe the slate clean.
How long does voluntary repossession stay on a credit report?
It will stay on a credit report for seven years. It negatively affects auto-related credit scores that determine the interest rate on your next car loan.
What happens after my car is repossessed?
The car is taken and sold at auction. If it sells for less than what you owe, you can be sued for the difference.
Related Post: How to Reclaim Your Car After Repossession.
How do I get my personal items back from a repo?
The lien holder may have a legal right to your car, but not to the items inside your car. Most repo companies notify you of where you can pick up your items. If not, Missouri law requires the lender to give back your items. Contact the lender with a list of what items you need. Aftermarket vehicle add-ons aren’t your property but part of the vehicle.
How can I stop repossession?
A Chapter 7 (liquidating assets to pay creditors) and Chapter 13 (restructuring debt) bankruptcy will stop a repossession, since the point of a repo is for the seller to get his or her payment You can also pay the loan amount in full, or you can buy the car back at its fair market value.
How does Chapter 13 bankruptcy stop repossession?
Filing for Chapter 13 bankruptcy allows you to keep your car while paying off the loan at a lower interest rate.
Does Chapter 7 bankruptcy get rid of repossession?
A Chapter 7 bankruptcy case can stop the creditor from selling the car at auction, but this only stops the repo temporarily.
What auto repossession notices are there in Missouri?
- Notice of Default and Right to Cure
- Notice of Our Plan to Sell Property
- Notice of Sale and Possible Deficiency
Can repossession be removed from my credit report?
If the lender cannot prove that your debt is accurate, fair or substantiated, the credit bureaus can remove the repo from your credit report. The time frame to negotiate this request can be limited and vary state by state.
Can I buy a house with a repo on my credit?
You can still apply for a home loan after having your property repossessed. The sooner you apply for one after a repo, the less likely you are to have your FHA loan approved.
Do I still owe money after repossession?
After a car or home has been repossessed, you may still owe the lender a sum of money called “deficiency.”
How does a repossession work, exactly?
Once the credit account is designated as delinquent by the bank, due to a missed loan payment, the lender can file for a repossession of the property. Banks have custody of the property via the repo agency, who hires third-party contractors to clean and sanitize the vehicle or home. These excess costs are pushed off on the debtor to pay.
What is a repossession agent?
Otherwise known as a “repo man” or a recovery agent, this person collects property from someone who defaulted on a loan made on the property.
How can a repo agent or team be stopped?
A repo company cannot trespass on private property to retrieve a car. If a repo agent “breaks the peace” or breaks the law during a repossession, you can call the police and stop the repossession from occurring.
Can I hide my car from the repo man?
Yes. So long as you are not trying to defraud the bank, you can avoid or hide your property from the repo agent.
Know your rights when it comes to repossession.
A repo company cannot trespass on private property to retrieve a car. Your property should not be damaged in the process. If it is, you may sue the repossession company for damages.
Hire Groce & DeArmon for repossession and bankruptcy help
Get trusted, experienced help from our seasoned bankruptcy lawyers. We can be there for you during the process of repossession and help you get the right legal aid and help to come out on top. Visit us online for a free consultation, or call us at 417-862-3706 to learn more.