How to Stop a Car From Being Repossessed

Watching a couple of guys repossess your car because you didn’t make the payments is not what you'd call fun. Whether your car is your prized possession or you just need it to get to your job , there are a couple of ways to stop your vehicle from getting repossessed. If you can’t make one of these options work, you might need to sell your car and pay off your loan to remove the threat of repossession.

Repayment Plan

Step 1

Contact your lender immediately upon missing a payment.

Step 2

As the lender to work with you to make up the missed payment. Most lenders do not want your car back. They’d rather get their money, so they’re inclined to work with you to get the payments. If your credit is good, the lender might agree to refinance your loan to extend the number of months to make payments. Some lenders might also give you a short grace period to catch up.

Step 3

Keep current on your payment plan once you catch up and you won’t run into trouble again.

Filing for Bankruptcy

Step 1

Obtain the documents necessary to file for a Chapter 13 bankruptcy to stop the bank from repossessing your car. The forms are available from a federal courthouse. You can also download Chapter 13 bankruptcy forms from the United States Courts website at uscourts.gov.

Step 2

Complete the paperwork to file for Chapter 13 bankruptcy. The paperwork consists of a Voluntary Petition, where you list the names and addresses of all creditors, including the lender for your auto loan. Other paperwork you need to submit with the petition includes a Statement of Current Monthly Income, a Schedule of Assets and Liabilities, a Schedule of Financial Affairs, and a Chapter 13 Plan that details how you intend to catch up with your overdue payments. The packet of forms you receive from the courthouse lists the rest of the documents you must complete. If you need help filling out the forms, consult an attorney for advice and assistance.

Step 3

Take the completed paperwork, along with the proper filing and administrative fees, to the court to officially file the documents. Once you file the documents, you get an automatic stay that stops the lender from repossessing your car. This buys you time to figure out how to catch up on the missed payments. The filing stops the lender from contacting you to try and get past due payments, too.

Step 4

Make the payments according to the Chapter 13 bankruptcy payment plan the court eventually approves to keep your car from being repossessed. If you do not make those payments, your car may be repossessed for failure to follow your Chapter 13 plan.

Warnings

  • Do not hide your car in an attempt to keep it from being repossessed. By doing so, the lender can charge you with theft since the car rightfully belongs to them until you make the final payment and own the car clear and free.
  • Filing for bankruptcy severely damages your credit, so bankruptcy should be a last resort.

About the Author

Nancy Wagner is a marketing strategist and speaker who started writing in 1998. She writes business plans for startups and established companies and teaches marketing and promotional tactics at local workshops. Wagner's business and marketing articles have appeared in "Home Business Journal," "Nation’s Business," "Emerging Business" and "The Mortgage Press," among others. She holds a B.S. from Eastern Illinois University.