Our New Jersey Debt Relief Lawyer Provides Insight Into Car Repossession
The creditor is legally entitled to reclaim the collateral when you fall behind on a secured debt, such as a car loan. This action, known as repossession, must be carried out without causing a "breach of the peace." To avoid confrontations, repossessions often occur during the night. Typically, this step is taken after a minimum of two missed payments and following repeated warnings from the bank regarding potential repossession.
When you discover your car missing from your driveway, the appropriate response hinges on your broader financial circumstances. Essentially, you must assess whether the missed car payments are an isolated issue or part of a larger pattern of unmanageable debt. If the latter is the case, it might be time to consider a more comprehensive approach to your financial troubles, potentially including bankruptcy. On the other hand, if missing car payments are your sole financial hiccup, then your immediate objective should be to find a way to recover your vehicle.
Steps for Getting Your Vehicle Back
To get your vehicle back, you must make amends with the bank. This usually involves paying the arrearages on the loan (the missed payments) along with the cost of repossession. This is because the bank wants your money, not your car.
Under New Jersey law, after repo, the creditor must send you a Notice of Repossession and Right to Redeem giving you the opportunity to pay off the loan (or bring it current) and the repo charge within a certain period. If they plan a public sale they must state the scheduled date; if it is a private sale they must give you at least 10 days notice.
The best thing to do is to call them immediately after the repossession and make arrangements to pay. The longer you wait, the bigger the problem. But what if yot don't have the money to bring it current? What if the car is not the only financial problem you have?
Leveraging the Power of Bankruptcy
Bankruptcy can provide a better overall solution to your financial problems, but for it to be effective in getting your car back you need to proceed as soon as possible. It also means filing a Chapter 13 petition with the repayment before the sale of the vehicle. This would allow you to get the car back without coming up with the money all at once.
Bankruptcy also allows you to prioritize payment of your debt. If you have been juggling payments to creditors and making the car payment has become more difficult because you have credit card bills to pay, then Chapter 13 can put the cards at the end of the line so that you can pay for the car first. You might even be able to lower your car payment!
What You Can Do if Your Car is Repossessed
Losing a car to repossession is often a symptom of a much bigger financial problem. If you are wondering whether you need a solution to a bigger problem, download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey to find out if bankruptcy might be the solution.
If you are a South Jersey resident having difficulty paying your bills and are considering bankruptcy, please call me at 856-432-4113 or contact me through this site to schedule a consultation in my Woodbury office to see if bankruptcy is right for you.
If bankruptcy is not the direction you want to go, but you still have creditors to contend with, then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights.
