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So, you missed a few car payments and now a tow truck is at your door. Don’t worry, all is not lost. Though it seems like you have no options left, there are still some things you can do to keep your wheels. Most of them aren’t pretty, but they will give you a better chance of keeping your car than simply handing over your vehicle and chalking it up as lost.
No, we don’t suggest doing anything crazy like putting a young child in the car or “just happening” to bring out your shotgun when you greet the repo man. There are a number of rational moves that you can use to try to keep your ride yours and not the bank's. Though most of these remedies are only temporary and some of them will really hurt, desperate car owners take desperate measures. This is Car Repossession 101: How To Avoid and Deal With the Repo Man.
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Keep your car in your garage.
The easiest way to get your car back is to not let them take it in the first place. A repo man cannot enter a private residence to retrieve a vehicle. This does not extend to your driveway or a side street, but a man's garage is his castle. If you keep your car in a private garage, it will not be repossessed.
Just be aware that a trip to Wal-Mart, your work parking lot, or any other public space could give the repo man the window he needs for repossessions. They will watch your house, and they will follow you wherever you go. Be aware that, eventually, your repossession agent will come back with a court order and a deputy. Needless to say, at that point, hiding your car will no longer be an effective deterrent.
Maintain good credit.
Obviously, this isn't something you can do after the fact, but if you keep your finances in good standing, lenders will likely be more forgiving when you hit hard times. Banks are much more apt to help out somebody who has hit a rare rough patch than someone who has been generally financially irresponsible. If your car's repossession is just the next in a long line of tough financial breaks, then it's going to be harder to get any mercy from your creditor.
Negotiate with your lending institution.
Odds are that if your car has been repossessed, you feel like you have an adversarial relationship with your lender. Contrary to the anger you might be feeling, your lender wants you to make your payments. It is in their best interest to get their money. The moment you drove your car off the lot, you devalued it.
There is no way that they are going to make more money with your car than you would have paid them. You might be able to get your car back by simply paying back fees and repo costs. If you can't make the payment right away, agreeing to a higher interest rate might do the trick, at least for a while.
Calmly talk with your repo man.
Many debtors start off by being confrontational with their repo man. Aggression is never a good first move; believe us when we say that whatever you can pull, these guys have seen worse. Though it doesn't always work, it doesn't hurt to attempt to strike up a deal with your repossession agent.
If you call your bank and inform them you would like to voluntarily surrender your vehicle, the repo man will give you a call to set up a time. Once you get the repossession agent on the line, you might be able to negotiate a short grace period. The repo man might agree to put your account on the bottom of the stack and focus on other repossessions while you get your finances in order. Of course, if you don't get your accounts in order by the time he circles back to you, he might make seizing your vehicle a priority. If you wait to negotiate until the repo man gets to your door, you probably won't have much luck.
Offer immediate partial payment.
Once again, the best time to stop repossession is before it happens. If you honestly think you just need to make it to that next paycheck, an immediate partial payment can buy you sometime. In some states, immediate partial payment guarantees you at least a day of reprieve as long as your institution accepts it. Your lender may agree to a longer time table, depending on the size of your partial payment.
Though your car may be eligible for repossession after the first delinquent payment, your lender will probably attempt to contact you before repossession. When they do, it can't hurt to attempt to try to buy more time before you lose your car.
Consider a case review.
One delinquent payment can make your car eligible for repossession. That being said, there are (rarely) instances where your car cannot yet be repossessed; there are many lawyers out there who will happily review your case for a small fee. If you have any reason to believe that your car has been wrongfully repossessed, it may be worth the legal fees.
Before you go this route, take an honest account of your situation. Banks don't want to repossess your property if they feel that they have a good shot at getting your money in a timely manner. If you've already got yourself in a tough financial situation, there is no need to toss more money down the drain to fight a repossession you know was legitimate.
Know what the repo men can and can't do.
This won't help you during this particular repossession, but if the repo man is out of line, you might be protected from further repo attempts in the future. Repo men are not allowed to "breach the peace." As you might have guessed, breaching the peace means issuing threats or using force.
Some debtors attempt to provoke a breach of peace, goading repo men into physical altercations. This can be effective way to stop a repossession, but obviously can have ramifications during and after the incident. We don't recommend you go that route. But, if the repo man enters your property without permission, threatens you, or uses physical violence, you may be able to delay or prevent future repossession attempts and even sue for damages.
Demand your car be sold.
Legally, your creditor has to give you an opportunity to purchase your car back. If you can catch up on your loan plus repo fees, then the car is once again yours. If you don't have the money when this offer is made, there is still hope. The creditor may opt to keep the car, but you can demand that they sell it at auction. You are legally allowed to attend the auction and even buy your own car back.
Even if you can't afford the car, you should attend the auction. If the car is sold for more than the outstanding debt, in some states the excess money goes to you (assuming you've already made payments on the car).
File for bankruptcy.
Bankruptcy is a move for those in dire straits, but if your car is being repossessed, you probably aren't doing great. Bankruptcy laws vary from state to state, but generally speaking there are two types of bankruptcy for individuals, Chapter 7 and Chapter 13. Those in Chapter 13 bankruptcy are allowed to keep most, if not all, of their property so long as they agree to and maintain a payment plan for their debt.
Chapter 7 bankruptcy allows you to cancel much of your debt, but a portion of your property will be seized in order to pay off a percentage of what you owe. These proceedings are, of course, relatively complicated, but the end result is that with Chapter 13 you should be able to keep your car and with Chapter 7 you might be allowed to keep your car if you apply for and receive a motor vehicle exemption. This should go without saying, but don't declare bankruptcy until you've sought professional counsel and have really thought through the consequences.