Vehicle repossession is one of the worst things that you can experience. The financial pressure that comes with it is stressful enough, but the prospect of losing your means of transportation can change your life. While the fear of repo can lead to sleepless nights, getting your vehicle towed due to non-payment can be downright humiliating.
No matter how much you depend on your car, do everything in your power to keep your lender from your vehicle away. In addition to consulting firms such as Law Office of Davis & Jones, P.C., here are the best ways to prevent repossessions in Salt Lake City, Las Vegas, Miami, and any other major city:
Work Out a Deal with Your Lender
First of all, talk it over with your lender. You might feel like the victim of a possible repossession, but realize that the other party doesn’t like it, too. The measure will cause financial loss to your lender because of the interest that won’t be paid anymore after the vehicle is sold at the auction. After all, the lending company only makes money from what you have to pay on top of the amount that you borrowed.
It’s in your lender’s best interest to help you keep the loan as much as possible. If you’re still in good standing, you might be able to ask for a delay. You can be allowed to skip a month or two to recover financially and resume making your regular payments.
Refinance Your Auto Loan
If you’ve only missed a few payments and your credit is still high, you can qualify for a brand new auto loan. You can use the funds to pay off your old mortgage and start fresh. If you’re lucky, you can snag a lower interest rate and probably even save money in the long run.
Sell the Car Yourself
When refinancing your current auto loan isn’t feasible, considering selling your vehicle and use the proceeds from the sale to pay for everything that you owe. This is a particularly viable option when your vehicle’s value exceeds the remaining balance on your loan.
Yes, you’ll lose your car in the end, but at least it stops the bleeding. Freeing yourself from a debt that you can’t manage allows your credit scars to scab and heal with time. Missing your payment continuously will blemish your credit, but allowing repossession to happen will drop your FICO score even further.
To get the most out of the deal, don’t use the specter of repossession as a talking point. Buyers might smell your desperation and use it against you.
File a Bankruptcy
If you can’t lose your car but want some space from several creditors, filing bankruptcy might be your last hope. A Chapter 13 bankruptcy provides automatic stay, which prohibits any collection attempt. Although bankruptcy is a negative piece of information that will stay on your credit report for up to a decade, it’s a necessary sacrifice to repay your financial obligation without turning over your keys.
You might put yourself in this situation, but you can also pick yourself up. With so many strategies that you can employ to head off a repossession, mull over your options and their consequences.