Are you struggling with car repossession? Many people are struggling financially during the COVID-19 pandemic and this can mean anything from having trouble paying rent to struggling with paying off car loans. If you are wondering how do you get a car back after repossession, you have options.
There are some state restrictions on debt collection practices, collection lawsuits, repossessions and post-judgment remedies during the global pandemic. Some states have put temporary restrictions in place that keep creditors and debt collectors from taking certain actions, including filing a collection lawsuit, seizing property, garnishing wages, repossessing a vehicle or freezing a bank account, during the COVID-19 pandemic and crisis.
Best Options on How do You Get a Car Back After Repossession
Even if your car, truck, van or other vehicle is repossessed during the pandemic, you do have options for getting your vehicle back. The best option depends on your loan agreement, your state’s laws, how much money you have and how willing your lender is to work with you. Here are some of your best options on:
- Redemption. One of the best and most reliable ways to retrieve your car after it is repossessed is to simply pay off the loan. This option is known as exercising your right of redemption. In order to pay off the loan, you need to pay back the entire balance, in addition to specific costs and fees, like repossession and storage fees. The bank is required to send you a written notice that includes all of the information you need to get your car back. You are allowed to pay back the balance of the loan and get your car back at any time before the vehicle’s auction or private sale. If you have not received a notice from the bank within five days of your car being repossessed, you should contact your creditor right away, so that you can get the information about the amount you need to pay and your instructions for redeeming your vehicle. Once your vehicle is sold or auctioned off to another owner, your right of redemption ends.
- Reinstatement. Reinstatement is not always an applicable option, but if you do not have enough money to redeem your vehicle, then you might be able to reinstate the vehicle loan. By reinstating the vehicle loan, you bring it current and pay off all of the past due payments, including applicable fees and late charges, in one big payment. Keep in mind that reinstatement might not be allowed, according to the terms of your loan agreement, but you should act as quickly as possible if reinstatement is allowed. You are typically only allowed to reinstate the vehicle loan for a short time following your car’s repossession, usually about 15 days. Your time period might be less or more than 15 days, depending on what your car loan agreement says.
- Chapter 13 bankruptcy. While a Chapter 7 bankruptcy will not help you get your car back, if you are undergoing a Chapter 13 bankruptcy, you can probably get your repossessed car back by making payments towards the vehicle, but you need to act as quickly as possible. You need to be able to show the court that you can afford to pay enough to pay off the vehicle loan while meeting all of your other obligations, like rent and other loans.
- Buy the car back at the auction. In many cases, after a car is repossessed, it is sold at a public auction. The bank is required to give you notice if your vehicle is being sold at a public auction. If this is the case, then you are certainly allowed to go to the public auction and bid on your car yourself in order to buy it back.
- Speak to the bank. If you are unable to redeem your car, reinstate the loan or buy your vehicle back at the public auction, then don’t worry, you still have other options. You can try to negotiate another financial arrangement with your creditor at the bank. For example, if you still owed five payments but you only have enough money to pay for three of those payments, you can possibly negotiate a partial reinstatement of the car loan and pay off the remainder of the past due payments at a later time. Another excellent option is attempting to create a new payment plan with the bank or refinancing the vehicle loan. Speak to the bank and determine what your creditors are willing to agree to. Keep in mind that it is usually better to speak to the bank before your vehicle is repossessed, but you might still be able to negotiate with them after repossession. Also, if you believe that your bank might have violated your rights during the vehicle repossession, you can use this as leverage to get your vehicle back.
- Speak to a lawyer. If none of the above options seem feasible for you or if you need help getting your vehicle back after a repossession, you should speak to an attorney. It’s always helpful to talk to an attorney if you believe that the bank has violated your rights or the law during the repossession process.
Another thing to keep in mind is that even if your car is sold, you might still owe money to the bank. For example, if your bank gave you a $15,000 car loan and you still owed $10,000 on it when you defaulted on your loan but the repossessed vehicle sold at the public auction for $7,500, then you would still owe $2,500 on the vehicle, plus repossession expenses in many cases. This amount is known as the deficiency balance, which is very common, especially if your car loan was for a new vehicle. If you ignore the deficiency balance, the amount will most likely be sent to collections, and the lender can still sue you for the remaining balance.
If you have lost your car and need to get it back after repossession, the Van Horn Law Group can help. Contact us or visit our website to learn more here.