When a vehicle is purchased on credit, the individual who purchased the vehicle must be sure to continuously make the payments; otherwise, the creditor will have the right to repossess the vehicle without going to court. In addition, many state laws allow a creditor to repossess a vehicle without an official warning. However, it should be noted that an individual possesses certain rights should he face repossession of his car.
Function
Creditors can repossess a vehicle if an individual fails to make a payment on time that violates the originally stated lease or loan. After one violates the lease or loan, the creditor can claim a default on the loan for the vehicle, which gives permission to the creditor to repossess the vehicle. In most states the law allows creditors to repossess a vehicle without any official notice at any time of the day. In addition, creditors are even allowed to enter the vehicle leaser's property to repossess the vehicle.
Effects
When a vehicle is repossessed by the vehicle's creditor, it will ultimately impact the individual borrower's credit report. Vehicle repossession will remain on a credit report for seven years and looks bad when the credit report is checked. If one faces vehicle repossession, he should initially check his credit, and see if the creditor did a proper investigation. An improper vehicle repossession investigation could result in the elimination of the repossession on the credit report.
Considerations
In certain cases creditors will negotiate with the individual whose vehicle has or will be repossessed. Some creditors will consent to an extension of the payment. However, one should rewrite a new legal agreement if the creditor agrees to a payment extension or any such changes to the original contract.
Prevention/Solution
In order to prevent having a car repossessed from a creditor, a person should initially make sure that he can financially afford the vehicle before signing any legal agreements. However, once the mistake has been made and the car has been repossessed, the best thing to do is contact an attorney referral service for legal assistance.
Legal Protection
There are rights given to the individual whose vehicle has been repossessed. First off, the creditor must carefully remove all valuables inside of the repossessed vehicle. If the creditor damages any valuables inside the vehicle, one possesses the right for compensation. Also individuals whose vehicles have been repossessed are many times protected with consumer protection laws to ensure the creditor doesn't sue them for a deficiency judgment, which is the remaining balance owed after the creditor has sold the vehicle. It should be kept in mind that deficiency judgment laws vary from state to state.
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