When you finance or lease a vehicle, you do not technically own it. Until the final payment is made, the creditor holds the title to your vehicle. The creditor you make payments to, retains the right to repossess your vehicle if you stop making payments or if you default on your loan. Understanding the law or seeking the counsel of an experienced New Jersey bankruptcy lawyer is the best way to know how to protect your vehicle from repossession.
Call the Creditor Early
It is in the best interest of the creditor to continue to receive payments on your vehicle. Therefore, discussing your situation with the creditor may lead to a payment plan that will allow you to keep your vehicle. It tends to be easier to negotiate with creditors before a repossession takes place than it is to dispute it after the fact. As soon as you become worried that you can no longer make payments you should call the creditor. You may be able to negotiate a delay in payment or even a restructured payment plan that works for you. If you do work out a new plan for your vehicle, make sure you get it in writing.
Creditors have the ability to repossess vehicles once the debtor defaults on the loan. Failure to make payments or even simply making payments late may be considered a default. Creditors are legally allowed to seize your vehicle from your property but they may not be able to forcibly remove a car that is stored in a garage. However, there may be steps you can take to keep your car in bankruptcy. Additionally, creditors are not allowed to damage property or to steal items from inside the vehicle. If you believe that your property was damaged or taken without your permission, you would be well-advised to consult with an attorney.
What Happens Next?
Once a vehicle is repossessed, the creditor may choose to sell the car publicly or privately. If there is a public auction for the vehicle, the debtor should be notified of when the auction will take place. If the creditor privately sells the car, the debtor should be aware of when the sale will occur. This gives the debtor an opportunity to buy back the vehicle. You may be required to pay for repossession expenses such as storage and sale preparation. You will have an opportunity to buy back your vehicle, but it may be at a different amount than the original purchase price.
Even if your vehicle is repossessed and sold to someone else, you may be liable to make additional payments. If, for example, there is a price difference between what you owed on the vehicle and what the vehicle sold for, you may be held responsible for that difference. Creditors may hold debtors liable for a vehicle deficiency through a deficiency judgment.
Consulting a Bankruptcy Lawyer in NJ
If you are worried that your vehicle may be repossessed or are currently facing a deficiency judgment, you should not hesitate to contact an experienced New Jersey bankruptcy attorney. Please contact the law offices of Robert Manchel at 866-503-5655. We understand how important a vehicle can be to maintain your quality of life and to protect your livelihood. Call us today to examine and evaluate your financial options.