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What Is Repossession and When Can It Occur?
When you purchase a car with a car loan, the loan document is very likely to include terms that address the consequences you’ll face if you fail to make your payments in accordance with the schedule included. The collateral on your car loan is the vehicle itself, and when the circumstances are right under the law, the lender can take your car back, which is known as repossession. It’s important to understand, however, that you – as the person named on the loan – have important legal rights, and an experienced Columbia, SC, bankruptcy attorney can help you protect them.
Repossession Can Only Occur after You Receive the Required Notice
Before a loan company can repossess your car, you must receive – either in the mail or in person – an official Notice of Right to Cure, which can’t happen until you’ve been in default on your loan for at least ten days. This notice sets the repossession process in motion, and at this point, you’ll have only 20 days to effectively address your late payments by bringing your account current or by taking another action that the lender agrees to. Once your 20 days have passed, your car can be repossessed.
Keep in Mind
Keep in mind that the lender is only required to send one Notice of the Right to Cure per loan, which means that if you fall behind in your payments again, you’re not entitled to another grace period before they proceed with repossession. Additionally, if the lender is a credit union, they’re not obligated to provide you with notice before repossessing your car for cause.
Filing for Bankruptcy Can Help
If your car has been repossessed, you’ll be afforded what is known as a redemption period. As such, you should receive a letter from the lender that tells you what you need to do in order to get your car back, which generally involves doing one of the following within ten days:
- Bringing your loan current
- Reimbursing the lender for the cost associated with repossession
Coming up with this amount may be out of the question, but failing to do anything could leave you owing money for a car you don’t own – if the lender sells it at auction for less than you owe. The good news is that filing for bankruptcy might be a good legal option.
How It Works
To get your car back after repossession – or to stop your car from being repossessed in the first place – you must address the matter before that redemption period elapses. If you file for bankruptcy, a stay that stops your creditors from taking action against you, such as repossession, will automatically go into effect. From here, your bankruptcy attorney will skillfully negotiate better financial terms for you, and while your credit score will be affected, you will likely be able to keep your car – while improving your financial standing over time.
Consult with an Experienced Columbia, South Carolina, Bankruptcy Attorney Today
The accomplished Columbia, South Carolina bankruptcy attorneys at Reed Law Firm dedicate their entire practice to bankruptcy and related cases, and we’re well-positioned to help you. Learn more by contacting or calling us at (803) 726-4888 today.