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Simon, Fitzgerald, Cooke, Reed and Welch
Simon Fitzgerald, LLC
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Options for borrowers facing car repossession

Missing several car payments might not seem like a big deal if you've grown accustomed to being far behind on your credit card bills. However, a car loan is "secured credit" and it's secured by your vehicle. As such, if you default on your vehicle loan, the bank can come and take your car from you without even asking.

Anyone who has an auto loan in default can expect to get their car repossessed: It's only a matter of time. If you're facing this situation, however, you have a few options.

Don't hide your car

It's important to get one thing straight. It's unlawful to purposefully hide your car from the repo man. In fact, it can be a criminal and civil offense in some cases. It's far better to reach out to your bank and discuss the options available to avoid the repossession of your vehicle. Hiding your car will only get you into trouble and it could potentially cost you thousands of dollars in bank fees and criminal and civil legal costs.

Negotiate, negotiate, negotiate

Banks are often more understanding than you might think. Your bank may be willing to negotiate and offer you different solutions -- and alternatives to repossession -- that help you get back on track.

Remember, your bank wants to get the money it loaned you and earn its interest income. If that means waiting a little longer before it gets paid, your financial institution will -- in many cases -- be willing to work with you toward an agreeable solution.

Stay calm if you have a "repo man encounter"

Never get confrontational with a repossession man. These professionals have seen it all and they will not respond to your aggression. You may even be able to make a deal with him by voluntarily surrendering your vehicle.

Here's how that might work. Call your bank and agree to surrender your car. Make an appointment with the repo man and kindly request that he delay the pickup of your car for as long as possible. During the days associated with this delay, you might be able to get your finances back good standing with your bank and render the repossession no longer necessary.

Consider filing for bankruptcy

If you file for bankruptcy, you might be able to cancel the repossession of your vehicle. In fact, in Chapter 7 bankruptcy many vehicle owners will be exempt from having their cars liquidated as a part of the bankruptcy.

Ultimately, there are quite a few more ways to deal with the threat of repossession than the ones listed above. The more you know about your options, the better chances you'll have of sidestepping and resolving your vehicle repossession fears.

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