Car repossession occurs when a person falls behind on their car payments and the creditor reclaims the car. The basic idea behind car repossession is that the car has been bought on a hire purchase or loan agreement. This means that the goods you have bought are not legally yours until payment for the goods has been settled in full. Once this has been achieved, you will be classed as the rightful owner of the goods.

If you fail to keep up the payments as stated in the agreement, then you can face repossession of the goods. If this happens, then a lender can take legal action against you for the money owed to him. Unless you have a grace period set out in the agreement, a creditor can take your car back if you are only a day late with payments.

Different states have different car repossession laws, but the creditor usually does not have to give any notice when taking back the car. There is no legal requirement for you to return the car, but the creditor may simply take it from the street or a parking lot. In a car repossession case, if you attempt to conceal your car with the aim of stopping the creditor from reclaiming it, this may be considered a legal offence.

With car repossession, the creditor may sell your car at an auction to regain some of his money. However, you will still be liable for the rest of the balance outstanding on your car. You may also be liable to pay the creditor’s expenses for the time and money involved in the car repossession.

Chapter 13 is a law that can prevent car repossession from happening. If your car has been repossessed but not sold by your creditor when the case is filed, the court may tell the creditor to return your car. With Chapter 13, interest charges can be reduced and monthly payments can often be lowered. In some cases, the balance due on the vehicle may be reduced to the car’s market value, even if it is less than the loan value.

Another benefit of filing for Chapter 13 when faced with car repossession is that the court may order you to pay for your car in a single monthly payment. This will consolidate all of your bills into one payment. This single payment can sometimes be lower than your previous car payment.