Your car may be one of your most valuable possessions. Not only may it be worth a good chunk of change—a few thousand dollars or more—but it may also be the thing that gets you to and from. Without your vehicle, you may have a hard time getting to work, running errands, transporting the kids to school and other activities, etc. Yet if you are facing large amounts of debt and miss a car payment, it’s important that you understand that vehicle repossession is a possibility. Here’s what you should know about the bank’s ability to repossess your car to cover a debt you owe—
When Can a Bank Repossess a Vehicle?
If you have a loan through your bank (or another lender) for your vehicle, then the automobile may be subject to repossession the moment you default on the loan by failing to adhere to the loan terms. In other words, if you don’t make your car payments on time, the lender may have every right to repossess your vehicle.
How Does a Vehicle Repossession Work?
Once you default on your loan, the lender has the right to repossess the vehicle. This right goes into effect the moment you default; the lender is not required to provide you with any notice. That being said, there are some rules that the lender has to follow in repossessing your car. For example, in West Virginia, it is against the law for a lender to “breach the peace” when repossessing your car. Usually, this means that they are prohibited from using force or threat to repossess the vehicle.
After repossessing your vehicle, your bank/lender is legally obligated to provide you with notice of the repossession and inform you that once you satisfy any outstanding issues, you have the right to repossess the vehicle.
Once your vehicle has been repossessed, there is very little that you can do other than pay your loan and meet the lender’s requirements; even filing for bankruptcy won’t stop or prevent the repossession. The best way to avoid repossession in the first place is to have a sound financial plan in place early on that ensures that you are making your vehicle payments on time and in full.
It should also be noted that while a lender can repossess your vehicle if you fail to meet your loan terms, your vehicle could also be lost in the event that it is listed as collateral on another loan that you have, or in the event that you filed for bankruptcy and it is a vehicle that’s non-exempt, and therefore can be liquidated to pay outstanding debts.
Get Help from a Skilled Bankruptcy Attorney
At the office of Hinkle Law, PLLC, our Martinsburg bankruptcy attorney understands that losing your car is a very big deal, both financially and otherwise. If you are at risk of losing your vehicle or if your car has been repossessed, we can help. Call our skilled bankruptcy law firm directly today for the help you deserve. Reach us now by phone or online for a consultation.