If the worst case scenario has occurred and your car has been repossessed, there may still be a way to get it back. Although the laws vary in each state, most allow so many days after a car is repossessed for you to get any personal possessions out of the interior. During this time, you may be able to negotiate with the lender and have your loan reinstated.
Receive notification of intent to sell the vehicle. Lenders have the legal right to sell your vehicle once it has been repossessed. However, they are also required to notify you of the pending sale. The length of time they must give you as a notice varies by state, but a general rule of thumb is about 10 days.
Gather your loan agreement and contact information for the lender of your car loan. You will need to know the date your car was repossessed and how far behind you are in car payments. Do not delay in calling the lender as your car may be sent to auction or sold to another party within just a few days. Ask the lender how you can get your loan reinstated.
Research the laws in your state or consult with an attorney. In an article by the Federal Trade Commission titled "Understanding the Rules of the Road," the authors indicate that not all states have a reinstatement law. In some states you will be required to "redeem" or buy back the car, paying the balance plus past due payments. In other states, you will have the ability to reinstate your loan by paying past due amounts, applicable fees and resuming car payments.
Negotiate the terms and get the terms agreed upon in writing. Lenders will sometimes allow you to pay back payments and any fees incurred in the repossession, such as those to paid to a towing or repo company and will reinstate your loan with your regular payment schedule. However, some lenders require that you pay the entire balance of your loan plus any fees to regain possession of your car.
Items you will need
- Car loan agreement
- If you're short on cash, ask the lender to create a new payment schedule that incorporates any additional fees over a longer period of time.
- Even if your car is sold before you can reclaim it, you may still owe money to the lender for the difference between the balance and what the lender was able to sell the car for.
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