If borrowers miss a few car payments and their mailboxes are full of the lender’s late notices, they may worry about what happens next. Borrowers at risk of vehicle repossession have certain options, of which many people are unaware. Here, readers can learn how a repossession lawyer may implement strategies to keep the vehicle.
The Redemption Process Can Bring a Loan Current
When a borrower misses a payment, they break the contract and enter default. Some jurisdictions allow the debtor to remedy the default through the right of redemption, which allows them to redeem the loan by paying the arrearage in a single payment. Most areas require auto lenders to send the balance and redemption instructions, but a borrower can call the bank and ask directly for the payoff amount. Once the loan is redeemed, monthly payments continue. However, many have difficulty with redemption because it means additional late fees, penalties, and interest.
Lenders Repossess Vehicles When Borrowers Can’t Make the Payments
A lender is not obligated to wait for a debtor to catch up on payments. If the loan can’t be redeemed, the lender can repossess the vehicle after one missed payment. The repossession process starts when the car is towed to a storage area from an easily accessible spot such as a parking lot or public street. While parking the car in a garage or in a secluded spot is a short-term solution, the borrower must still deal with the loan default and the idea that their car may disappear at any time.
Reclaiming a Car After Repossession
In most cases, it’s possible to redeem a vehicle after a repossession. However, the longer the delay, the more the process will cost due to storage costs and repossession fees. A borrower only has a short time to reclaim a car, and those finding themselves in this position should consider hiring an attorney as soon as possible.
Filing Chapter 13 to Keep the Vehicle
If a person wants or needs their vehicle, they may be able to keep it with a chapter 13 filing. However, the borrower will need enough income to afford living expenses, the monthly payment, and any arrearages over the course of a repayment plan that may last from three to five years. If a borrower isn’t sure what’s best for his or her situation, they should consult a local repossession lawyer with Stlbankruptcyfirm.com.