Debts against which the creditor has collateral are known as secured debts. Examples of secured debts include automobile loan, mortgage, etc. Since both these are essential for living a comfortable life, it is important that you are not behind on payments for such loans. Having a vehicle has become a necessity these days, considering that commuting time is considerably reduced due to them. Missing payments on your automobile loan can have severe consequences. The lender can repossess the vehicle if you end up missing payments. However, having experienced lawyers like those of Los Angeles based bankruptcy law firm Recovery Law Group can help stop such proceedings effectively.
You will be surprised to know that repossession is far easier than foreclosing on your home or threatening with a lawsuit in case of credit card dues. Vehicle insurance is mandatory in some states. If you neglect the insurance coverage of the vehicle and are current with the loan company, you might still end up losing your vehicle. Generally, if you miss one payment, you get a reminder call to make payment along with the late fees. However, if you fail to make a payment on the due loan, the lender can act against you, which includes repossessing the vehicle.
Can you protect yourself against creditor action?
Though defaulting on the loan provides the lender a chance to repossess the vehicle, there are certain protections in place for the owner too. These include:
- The lender (or any other person acting on behalf of the lender) cannot enter your closed garage without permission.
- They cannot threaten or use force against you.
- Violation of any of the laws can result in a legal damage case against them.
- Any personal property within the vehicle when it is seized by the lender remains your property.
- The lender must ensure the safety of any such property and provide you with details regarding its retrieval.
In case you decide to not pay the arrears and repossession cost, the lender has the right to keep or sell the repossessed vehicle. However, they need to intimate you when and where the vehicle will be auctioned off. You can bid for your vehicle if you choose to. It is important that the vehicle is sold for a fair market price. In case, the lender sells it below market rate, you can claim damages against the lender and argue for a deficiency judgment. If you are behind on your automobile loan payments and are on the verge of vehicle repossession, it is important you call 888-297-6023 to schedule an appointment with adept bankruptcy attorneys Los Angeles before any legal action is taken against you.