Lenders tend to be more accommodating when you find yourself in financial difficulty and many are willing to consider alternatives other than repossession as possible solutions.
Unfortunately, lenders can legally repossess your vehicle even when only one payment has been missed, because they do not need to wait a certain number of payments before repossession occurs.
Partial Payments Are Not Exempt from Repossession
Repossession can only be avoided through making full payments; to understand this is important before signing for any kind of loan or line of credit.
When people take out loans, they agree to repay their debt in accordance with their contract terms and any agreements or regulations made as part of that loan agreement. If they don’t do this, lenders have every right to seize collateral property – whether that be cars or other valuables used as security – without further recourse by law. There may be time constraints before repossession proceedings begin but in reality even one missed payment could lead to repossession proceedings being started immediately by their lender.
Repossession can have devastating repercussions for any borrower’s credit rating and will remain on their report for up to seven years, making it more difficult for them to obtain another loan or purchase property. Therefore, those having difficulty making car payments must work with their lenders to see if a solution can be found quickly.
Most lenders can work out an arrangement to avoid repossession, so it’s critical that a person does everything possible to stay current with payments – including working with a credit counseling agency.
They Are a Breach of Contract
People behind on payments often think that making partial payments will stop lenders from repossessing their car, however this will only postpone repossession and not prevent it completely – since creditors are allowed to seize vehicles after even one missed payment and there are no exceptions to this law.
Avoiding car loss requires making regular monthly payments on time without ever missing one, and if you are already late you must work with your creditors to come up with a plan such as deferring or reducing payments in order to bring up to date.
Repossession proceedings typically do not start until you’re several payments behind, giving them time to arrange with a repo company and give you more time to catch up. If no agreement is made between yourself and the creditor to lower payments, they will report missed payments or defaulted accounts to credit bureaus which could further negatively impact your score.
Sollte you have your vehicle repossessed by creditors, all fees associated with repossession must be paid, including storage charges and attorney’s fees. They may even seek reimbursement of its value from you.
They Are a Breach of Statute
Lenders have the right and are legally permitted to repossess your vehicle if you fail to meet the terms of your loan contract, missing even one payment is sufficient grounds. While you can try working out an arrangement with them to prevent repossession, that won’t prolong how long it will be until they send out tow trucks; additionally it won’t give them any reason to reduce your payments either.
If you have an excellent relationship with your lender, they may overlook any missed payments and work with you instead of simply repossessing the vehicle. Some will even offer loan modifications as an option to assist with financial difficulties instead.
However, if you are already behind on your auto loan payments they are unlikely to be forgiving; they can legally use devices on your car to prevent it from starting as well as taking it from private property (like your garage) without providing prior notification.
Repossession can be an extremely devastating event and may even result in bankruptcy. Not only will your car be taken, but all personal items like stereo systems or hubcaps may also be taken. Your lender cannot keep or sell these items after repossessing and selling off your car; any proceeds must go toward covering any deficiencies on your loan agreement.
They Are a Breach of Trust
Responsible borrowers will find themselves working closely with their lender. In most instances, this means avoiding repossession. But should your finances deteriorate significantly and they believe you won’t be able to repay your car loan, they may opt for repossession.
Creditors in most states can repossess vehicles without needing court orders, because loan contracts contain an acknowledgment that lenders can repossess vehicles if you fail to make payments and fail to keep up payments on secured loans such as auto loans. Lenders are allowed to repossess your vehicle using force only when necessary and cannot store or hide the car on your property or private garage before selling it at auction.
Once your car is repossessed, you must attend a public auction where the seller advertises and invites bids for its sale. If it does not fetch as much as what is owed on it, any differences must be paid directly to creditors.
Breach of trust charges should never be taken lightly, so if you find yourself facing such accusations it’s wise to seek legal advice as soon as possible. Contacting a South Carolina breach of trust attorney today and schedule a consultation appointment. They can explain the law while fighting to defend your rights in court.