My Car Has Been Repossessed - What Now?

Posted on: 18 August 2015

You woke up this morning to find that your car has been repossessed, likely leaving you stranded and unable to get to work. You are faced with many difficult questions: What will happen to personal items that were left in my vehicle? Will I be able to get my vehicle back? How will this affect my credit? What do I do now?

Researching State Laws on Repossession

The first thing you want to do, is get informed about your state's laws on vehicle repossession. Each state will have its own set of laws a creditor must follow when repossessing a vehicle. Failure to comply to these laws could result in the loss of rights against you.

What will happen to personal items that were left in my vehicle?

If you had any personal items in your vehicle at the time of repossession, you are entitled to reclaim these items. It is important to review your loan agreement, as some will outline a specific time period in which you must request these items. This is limited to personal belongings inside the vehicle, however, and not items attached to the vehicle, such as stereo systems, wheels, etc.

 Will I be able to get my vehicle back?

Getting your vehicle back after repossession is not easy, but it's not impossible. Some states have an option of reinstating the loan. When you reinstate your loan, you're paying all the late payments, as wells as any fees incurred in the repossession process, at one time. You are generally given a very short time to do this, and the amount of time you are given will vary based on your loan agreement.  

If you reside in a state that does not allow for reinstatement of a loan, you have the option of redeeming your loan. After the vehicle has been repossessed, you will receive written notice from the bank that will give you information on this process. To redeem your loan, you will have to pay off the loan in its entirety. In addition to that, there will be certain fees associated with the car repossession that must be paid. 

Your creditor may decide to sell the car at an auction. In some states, it is required that you be made aware of where the auction will be taking place so you have the opportunity to bid on the vehicle.

How will repossession affect my credit?

Vehicle repossession will not look good on a credit history. It will suggest to future lenders that you are unreliable at making payments. The best way to salvage your credit after repossession is to pay off the withstanding debt as soon as possible. Talk to your lender about settling the debt or setting up a repayment plan. As time passes, and you practice good credit habits, the repossession will impact your credit score less. After seven years, the repossession will fall off your credit report.

In addition to consulting with your bank, contact a towing company, like Tri City Towing And Recovery, to discuss procedures for reclaiming your possessions and your car after repossession.