If you are behind on your auto loan payments, you are probably weighing your options. You may be worried about when or where the repossession will take place and if you’ll be stranded afterwards, unable to get to work or conduct other daily activities. You may even think that if you do nothing and let your car get repossessed that you will no longer be obligated to your creditor. The truth is that your creditor is entitled to the full amount that you agreed to pay according to your loan contract.
Repossession doesn’t automatically settle your debt.
When a car is repossessed at work or at home, it can be very embarrassing and overwhelming. It may not seem fair that creditors can take back your property and still demand money from you, but it is legal. If your repossessed vehicle fails to sell at auction for the exact amount you owe, you will continue to be liable for that remaining debt’s balance.
The Process of Repossession
In Georgia, a creditor can use “self-help” (repossession) to recover property if the buyer defaults on the contract. Secured debt is different from unsecured debt like credit cards or personal loans because the debt is attached to (or “secured” by) the property you purchased with the loan. It is the loan’s collateral and it can be your car, jewelry, or furniture.
Typically, vehicle repossession can take place without direct access to your home. If you default on your payments, the creditor hires a recovery (or “repo”) company to repossess the vehicle from your home, job, the mall, or any other place they can locate your vehicle.
After your vehicle is towed to a storage lot, you will receive a notice informing you that you have 10 days to “cure the default” or pay the debt or your car will be sold at auction. Usually the lender will demand the entire balance owed on the contract.
If your car has already been repossessed, you have a very limited window within which to get it back. Aside from paying off the car completely, bankruptcy is usually the only option for recovering your repossessed vehicle.
When you file for bankruptcy, you can keep your car!
Besides stopping repossession, Chapter 13 bankruptcy offers the added benefit of lowering your car payments, if you qualify. Depending upon your specific circumstances, we may be able to lower your interest rate and reduce your entire balance, as well.
Hiding a vehicle can cause civil or criminal penalties.
Hiding your car only temporarily alleviates repossession and is not recommended. If you attempt to hide your car, your lender will most likely file a Complaint for Personal Property Foreclosure and obtain a court order requiring you to turn over the vehicle. Because it’s collateral on a secured debt, they have a right to repossess it if you don’t pay the car note on time. So, hiding your vehicle to prevent Georgia repossession is not a good idea.
But, even a few days without your car can cause you serious consequences, including losing your job, difficulty getting around, responding to emergencies and other challenges. If you are behind on your auto loan payments, you need to seriously consider how not having a car will affect you and your family and act quickly.
The Ballard Law Group is available to answer questions about customized debt resolution, including exploring all of your options for keeping your car. Call us today at 404-220-9906.