If you’ve begun missing car payments then chances are a repo person will be dispatched to show up for your car pretty soon. Technically the creditor has the right to do this if you miss even a single car payment. In reality, they often wait until you are about three payments behind.
Usually you know it’s coming. You get a Notice of Default in the mail. Don’t be embarrassed: it can happen to just about anyone.
But it’s important to know what the repo person can or can’t do.
They can’t damage your property.
The repo person can take your car from just about any location, but he or she has to do it in a peaceful manner. That means they can’t just break into your locked garage to take the car.
They can’t threaten you.
They’re not allowed to claim they’re going to send you to jail (they can’t). They’re definitely not allowed to make threats of physical violence.
They can’t take other pieces of property.
They cannot, for example, steal your RV because they can’t get to your car. Or walk in and order you to give up your furniture. Or walk into your home and grab your computer.
Keep in mind a future lawsuit could mean losing some assets to your creditors. They can attach to things like your tax return, and in some cases they gain the right to reach right into your bank account.
They can report the defaulted loan to the DMV and your insurance company.
They do this to make it harder for you to get insurance and license plates. After all, as far as the creditor and their repo person are concerned, you’re driving around in the bank’s car, not your own.
You don’t need to hide the vehicle.
And you shouldn’t. Because first off, the repo person can’t take your car if you calmly explain he or she cannot come onto your property and may not take the car. And second of all, you can be charged with fraud, which is a criminal charge.
Note, all this does is buy you some time. At this point you need to be thinking seriously about filing for bankruptcy. Bankruptcy will put a stop to the repossession.
See also: What is an Emergency Bankruptcy?
But if you don’t, your creditor can then take you to court, where a judge will then order you to give up the car. And then there won’t be anything you can do about it without being in contempt of court.
The second reason you don’t want to hide the vehicle is this: as long as you’re making the repo person play hide-and-seek without just saying, “You may not take the car,” the more money he or she is charging the finance company. The finance company is going to turn around and pass all those costs on to you.
If you end up going to court to receive a judgement that says you have to give up the car, you’ll end up paying those court costs, too.
And you certainly shouldn’t attack the repo guy.
If the repossession professional uses force or threats, you can sue.
You will need to document the event, take pictures of any damaged property, and gather the names and numbers of witnesses.
If your suit is successful, your damages could amount to 10% of the loan’s principal, plus finance charges. Sometimes, the judge will rule that the creditor may no longer attempt to repossess the car.
What if you just let the repo guy take the car?
That’s not very helpful either. If you lose your car and your means of getting to work, you don’t even get out of your debt. Instead, the creditor will sell your car at auction (you must get written notice of where and when it happens).
The bank will then take the difference between what the car sold for and what you owe. The result is your “deficiency balance,” and they can sue you for that amount.
If you’re in danger of repossession, consider filing for bankruptcy.
Don’t just give up the car, either.
If you want to keep your car, stop creditors in their tracks, and end up with a clean slate, bankruptcy is the way to go. And when you receive your discharge you won’t owe anything else on the car, nor will the bank be able to contact you about it ever again.