3 Options to Get Your Car Back After It's Repossessed

The fastest way to get your vehicle back is, unfortunately, the option that few people can afford to do. This is called redeeming the car. To redeem the repossessed item, you would need to immediately pay the full amount due on the loan. Of course, redemption also requires that you act quickly to get the vehicle back before it is sold by the financing company. 

Such an option is something that some borrowers can manage to do. You may be able to borrow the money from a relative, for instance, or sell a different asset. The downside for most borrowers, though, is that they must replace the first loan with a new amount of debt to be repaid (possible at a higher cost). This may save your vehicle for now, but it may not benefit - or even worsen - your overall financial picture.

A more doable alternative is to reinstate the loan by bringing it back up to date. Talk to the lender and find out how much it would take to bring the loan current and retrieve the car. You will likely need to pay all the past due payments as well as other fees and interest.

Is reinstatement a good option for you? That depends on your circumstances. Most borrowers who are far enough behind to suffer from repossession do not have the funds available to write a large check today. You should also seriously think about whether you will end up in the same situation shortly down the road. If your financial status has not changed, simply paying off old payments may not benefit you for long.

If you are already in over your head so much that you cannot make those monthly payments, you should consider declaring bankruptcy. Several reasons exist for why this is may be a better long-term solution than other ideas.

First, filing for bankruptcy generally provides an automatic stay. A stay is a legal order that prevents any creditors from taking further actions to collect on your debt. In the case of a repossessed vehicle, the creditor likely will not be able to sell the car at auction until they get permission from the court. But you must act before the car can be sold or you risk losing it anyway.

Secondly, bankruptcy changes your financial situation for the better. Other debt, collections efforts, and accruing interest can be wiped out so that you have more money left each month to pay the debts you do want to keep - such as your vehicle. You stop paying for old debt and can start planning for a more stable future. For someone with unmanageable debt, this is more advantageous than just reinstating the car loan.   

Only you can make the best decision for your unique circumstances. But all three options - and others that may become available - generally have one thing in common: you must act quickly. The best way to move forward is to consult with an experienced attorney who deals with repossessions.

At Custer Custer & Clark LLC , our legal team has navigated many repossession cases before. We can help you learn about your right and your options so you can make a good decision that will result in a more positive outcome. Call today to learn more. We look forward to speaking with you.