Charlotte Bankruptcy Attorney: Ways You Can Stop Repossession

Facing Repossession? Here's Your Roadmap to Recovery

Falling behind on car payments can be stressful, especially when worrying about losing your vehicle. If you’re facing this situation in North Carolina, don’t panic. There are several ways to stop repossession and keep your car. This article will explore your options and help you understand the repossession process. If you need more help, a Charlotte bankruptcy attorney can guide you through these challenging times and provide personalized advice based on your situation.

Key Takeaway:

In North Carolina, lenders can repossess your car without warning if you miss payments. Repossession can happen quickly, even while you’re at work or asleep. There are six ways to stop repossession: contact your lender, catch up on payments, refinance your loan, sell the vehicle, voluntarily surrender it, or file for bankruptcy in North Carolina. Each option has its benefits and drawbacks. Acting quickly and choosing the best approach for your situation is essential.

If your car is already repossessed, you still have options. You can pay the full amount owed, try to reinstate the loan, repurchase the car at auction, file for bankruptcy, or negotiate with the lender. Lenders must follow specific rules during repossession, such as not using force or entering your home without permission. You have the right to remove personal items from your car before it’s towed away.

Repossession can hurt your credit score for up to seven years. To prevent future repossessions, create a budget, set up automatic payments, and build an emergency fund. Consider cheaper transportation options if car payments are too high. Remember, lenders often prefer to work out a payment plan rather than repossess your car. Acting quickly and understanding your rights can help you keep your vehicle or minimize financial damage.

Understanding Repossession in North Carolina

In North Carolina, lenders can repossess your car without warning if you miss even one payment. They don’t need court permission or to tell you beforehand. Repossession can happen while you’re at work or asleep. Lenders often use technology like digital cameras and computers to find cars quickly, so hiding your vehicle isn’t a good long-term solution.

The typical timeline for repossession varies, but many lenders start considering it when you’re 45-75 days behind on payments. However, some lenders, especially “buy-here, pay-here” lots, may move to repossess much sooner.

It’s important to note that repossession laws differ by state. In North Carolina, lenders have significant rights regarding reclaiming vehicles, but they must follow specific rules to avoid “breaching the peace.”

6 Ways to Stop Repossession

If you’re facing the threat of vehicle repossession, acting quickly and decisively is essential. While the situation may seem dire, you have several potential options at your disposal. Each method has its advantages and considerations, so it’s important to evaluate which approach best fits your circumstances carefully. Let’s explore six effective strategies that could help you keep your car and avoid the serious consequences of repossession:

Contact Your Lender: Call your lender immediately if you’re struggling with payments. This simple step can prevent repossession. Lenders might offer options like:

Changing your payment due date to align better with your pay schedule
Lowering your monthly payments by extending the loan term
Pausing payments for a short time (known as forbearance)
Modifying the terms of your existing loan

Remember, lenders aren’t required to work with you, but many prefer to avoid repossession if possible. It’s often more cost-effective for them to work out a new payment plan than to go through the repossession process. Be honest about your financial situation, and be prepared to explain why you’ve fallen behind and how you plan to catch up.

Catch Up on Payments: Try to get current on your missed payments if you can. This might include late fees and other charges. Check your loan terms to see if there’s a grace period before you’re officially in default. Some lenders may not consider you in default until they’ve sent written notice, giving you a chance to catch up.

If you’ve come into some money or can borrow from family or friends, paying the past-due amount can immediately stop the threat of repossession. However, ensure you can keep up with future payments to stay caught up.

Refinance Your Loan: Look for a new loan with better terms. This could mean:

Lower interest rates, which can significantly reduce your monthly payments.
More extended repayment periods spread the cost over more time.
Lower monthly payments, making them more manageable.

Shop around for lenders who offer better deals. Credit unions, online lenders, and even some traditional banks might be willing to refinance your auto loan. If your credit score has improved since you first got the loan, you might qualify for better terms.

Remember that while lower monthly payments can provide immediate relief, a longer loan term means you’ll pay more in interest over time. Weigh the short-term benefits against the long-term costs.

Sell the Vehicle: If you can’t afford the payments, selling the car might be a good option. Use the money to pay off the loan. This approach has several benefits:

You avoid the negative impact of repossession on your credit score.
You have more control over the sale price.
You might get more for the car than the lender would at auction.

If you get less than you owe, you’ll still need to pay the difference, which is a deficiency balance. But this can be better than repossessing the car, where you’d likely have a deficit balance anyway plus additional fees.

Before selling, check with your lender about the payoff amount and the process for transferring the title to a new owner. Some lenders may even help you sell the car to avoid repossession.

Voluntarily Surrender the Vehicle: If you can’t keep up with payments and don’t see your financial situation improving soon, you can return the car to the lender. This is called voluntary surrender. While it hurts your credit, it can be less damaging than repossession. Benefits include:

Potentially lower fees than a forced repossession
Better control over when and how you return the vehicle
Possible goodwill with the lender, which might help in negotiating the remaining balance

You might also owe less money afterward, as you’ve saved the lender the cost of hiring a repossession agent. However, you’ll still be responsible for any deficiency balance after the lender sells the car.

File for Bankruptcy: Bankruptcy can stop repossession, at least temporarily. When you file, the court issues an “automatic stay.” This tells creditors to stop trying to collect debts, including repossessing your car. Two main types of bankruptcy can help:

Chapter 7 Bankruptcy: This might delay repossession, but you could still lose the car unless you can negotiate with the lender or redeem the vehicle by paying its current value in a lump sum. Chapter 7 is often quicker and might be suitable if you don’t want to keep the car.
Chapter 13 Bankruptcy: Chapter 13 lets you keep the car and catch up on payments over time, usually 3-5 years. You’ll propose a repayment. Plan to the court, which can include your car payments. This can be a good option if you want to keep your car and have regular income to make payments.

A Charlotte bankruptcy attorney can help you understand which type of bankruptcy might suit your situation. They can explain the pros and cons of each option and guide you through the complex bankruptcy process.

What to Do If Your Car Is Already Repossessed

If you’ve woken up to find your car missing or returned home to an empty driveway, don’t panic. While having your car repossessed is undoubtedly stressful, it’s not necessarily the end of the road. You can still take several steps to potentially recover your vehicle or at least minimize the financial impact. Even after repossession, you have rights and options. Let’s explore what you can do if your car has already been repossessed:

Redeem the vehicle: To get the car back, pay the full amount you owe, including repossession costs. This option is often difficult because it requires a lump-sum payment.
Reinstate the loan: Some lenders might let you catch up on missed payments and fees to get the car back. This isn’t required by law in North Carolina but might be in your contract.
Repurchase the car at auction: The lender must inform you about when and where they plan to sell the car. You can attend and try to buy it back, but you’ll be competing with other buyers.
File for bankruptcy: In some cases, especially with Chapter 13 bankruptcy, you can get the car back and resume payments.
Negotiate with the lender: You can negotiate a deal to get the car back or reduce what you owe after the sale.

Act fast, as lenders can sell repossessed cars quickly, often within 10-15 days of repossession.

Your Rights During Repossession

While lenders have the right to repossess your car if you default on your loan, they must follow specific rules. Repo agents can’t “breach the peace” when taking your car. This means they can’t:

Break into your locked garage or home
Use or threaten violence
Take the car if you verbally object at the time of repossession
Enter your home without permission
Damage your property while taking the car

If repo agents break these rules, you may have legal recourse. Document any violations and consider discussing your options with a Charlotte bankruptcy attorney or consumer rights lawyer.

Additionally, you can remove personal belongings from your car before it’s towed away. If you were absent during the repossession, the lender must give you a way to retrieve your items.

The Impact of Repossession on Your Credit

A repossession can significantly damage your credit score and remain on your credit report for up to seven years. This can make it harder to get loans, credit cards, or even rent an apartment in the future. That’s why it’s essential to take action before repossession occurs, if possible.

Preventing Future Repossession

Once you’ve dealt with the immediate threat of repossession, it’s essential to take steps to prevent it from happening again:

Create a budget to ensure you can afford your car payments.
Set up automatic payments to avoid missing due dates.
Build an emergency fund to cover unexpected expenses.
Consider less expensive transportation options if your car payment is consistently unaffordable.

Act Now: Consult a Charlotte Bankruptcy Attorney to Stop Repossession

At the Law Office of Jack G. Lezman, PLLC, we understand how stressful facing repossession can be. We’re here to help you explore all your options and find the best solution for your unique situation. Our Charlotte bankruptcy attorneys can guide you through stopping repossession and regaining control of your finances.

We’ve helped numerous clients in Charlotte and throughout North Carolina navigate complex financial challenges, including those involving both bankruptcy and immigration matters. Our team is committed to providing legal support tailored to your specific needs.

Don’t wait until it’s too late—reach out to us today. We can explain your rights, help you understand the repossession process, and work with you to develop a strategy that protects your vehicle and your financial future. Whether you’re negotiating with your lender, exploring bankruptcy options, or addressing any immigration concerns, we’re here to provide the legal guidance you need.

Contact the Law Office of Jack G. Lezman, PLLC now to schedule a free consultation. Let us use our skills to help you take the first step towards financial stability. Your peace of mind is our priority, and we’re ready to stand by your side through this challenging time.