Yes, you may be able to prevent a repossession from happening. The trick is to talk to your lender ahead of time and let them know what’s going on. Even if your lender says they can’t help, it doesn’t hurt to keep them in the loop and explain your situation.
Talk to Your Lender First
If you know you’re going to be behind on the next car payment, reach out to your lender as soon as possible. Just one missed payment could result in a repossession, and the best way to try and avoid it is to talk to your lender. They may let you skip the next payment and tack it onto the end of the loan term, or provide other options that don't lead to repossession.
If they can’t offer any help and you’re faced with the possibility of repossession, you have three options to consider.
Option 1: Get Current With Payments
If you can come up with the money to cover the missed payment(s), late fees, and any other charges, you may be able to prevent a repo.
Most of the time, you have 30 days before action is taken against you. But make sure your loan agreement states that you aren’t in default until 30 days have passed.
Option 2: Refinance Your Car Loan
If your financial situation has changed and you don’t think you can make the next monthly payment, you can try and refinance your auto loan to get a lower monthly payment.
In order to refinance, your credit should have improved since taking on the initial auto loan. You can either extend the loan term, or see if you qualify for a better interest rate to lower your monthly payment.
Option 3: File for Bankruptcy
A last resort option for preventing repossession is to file for bankruptcy. According to legal experts at Nolo.com, it’s possible that filing for bankruptcy can prevent repossession, but this isn’t guaranteed.
Depending on the type of bankruptcy you file and how much debt you have, you may still end up losing your vehicle. Discuss this with your lawyer to further understand how filing for bankruptcy can affect your car loan.
Getting a Car Loan After Repossession
Having your vehicle repossessed isn’t something you want to deal with. If you do end up losing your car, your credit score is going to be affected, which makes getting financing in the future more complicated.
If you’re in need of a vehicle after a repossession, but aren’t sure where to find financing, we want to assist . Auto Credit Express helps consumers get connected to dealerships near them that offer financing to credit-challenged car buyers.
Let us show you how easy it can be to get back on the road and on to better credit. Fill out our simple and secure auto loan request form to get started today.
