If you default on a car loan, the creditor has a right to take the vehicle. This is usually done after you have missed at least two payments and after threats of repo by the bank. What you do after you wake up with your car gone from your driveway depends on your overall financial situation.
In other words, was the car payment your only problem, or are you dealing with an overall situation of heavy debt that you cannot manage? Even simpler, are you contemplating bankruptcy?
If you are not looking at filing bankruptcy, then you have to 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 really just wants your money, not your car.
If you are filing bankruptcy, then you need to proceed as soon as possible. If you want the car back you will have to file a chapter 13 petition with repayment plan prior to the sale of the vehicle.
In New Jersey you are usually able to get the car back if you pay the repo costs, putting the loan arrearage into your plan. However, it might be possible to put the repo costs in the plan as well.
