Having your car taken back by a lender is understandably a terrible experience, and you might be wondering what your options are. Although there are steps you can take on your own, a lawyer knowledgeable about car repossession can help. Most importantly, they can explain the car repossession process and provide you with options specific to your situation. This article will explain how a lawyer can help you, what things lawyers cannot do in the event of a car repossession, and how to find a lawyer.
Having your car taken back by a lender is understandably a terrible experience, and you might be wondering what your options are. Although there are steps you can take on your own, a lawyer knowledgeable about car repossession can help. Most importantly, they can explain the car repossession process and provide you with options specific to your situation.
This article will explain how a lawyer can help you, what things lawyers cannot do in the event of a car repossession, and how to find a lawyer.
How a Lawyer Can Help You Handle a Car Repossession
Car repossession can be a complicated process, and what options you have depends on your situation and your goals. A lawyer for car repossession can help you by figuring out what those options are and provide you with expert advice on what choices to make next.
First, it’s important to understand what a car repossession is. Car repossession is when a lender, usually a bank, takes back a property that the borrower used to secure a loan. This can happen because when a borrower uses a property to secure a loan, they agree to allow the lender to take it back should they be unable to make the required payments. It’s why these types of loans are called secured loans. In the case of a car loan, the car is taken back when the borrower has stopped making the required monthly payments or continues to make significantly late payments.
A Lawyer Can Help You Decide Whether and How To Keep Your Car
Generally, if you are about to have your car repossessed, you have four options available to you:
Purchasing the car at the auction, or
Giving up the car.
In car repossessions, you can redeem a car by paying the remaining loan balance. In this case, you get to keep the car. But, in addition to paying off the entire loan all at once, you’ll have to pay the lender for the repossession costs, storing the repossessed car, and sometimes legal fees. This is usually not the best option in car repossession, since a large lump sum payment is difficult to make. In many states, a lender is legally required to notify you that you have the right to redeem the car before the repossession becomes final.
Reinstating the Loan
By reinstating the car loan, the lender is giving you a second chance to make the required monthly payments on time. Like redemption, reinstating the loan will stop the car repossession from being finalized.
Purchase at Auction
Often, lenders will sell the car at auction after repossession. If you can’t redeem the car and reinstating the car loan is not possible, you might be able to purchase your vehicle back at this auction.
Give Up the Car
In some cases, giving up the car may be the best option for you. It really depends on your financial situation, how much you owe on the loan compared to how much your car is worth, and your goals. A lawyer for car repossession can explain the pros and cons of each of these options and help you decide which is the best option for you. Along with their expert legal advice, they will take care of any communication with the lender and handle any required paperwork.
A Lawyer Can Represent You in Any Deficiency Lawsuit Related to the Car Repossession
If your car is being repossessed, the lender may file a deficiency lawsuit against you. A deficiency lawsuit is a lawsuit filed to recover the difference between the value of the car and the outstanding balance of the car loan. The difference between the two is called a deficiency balance. These are common because even though the loan is secured by the value of the car, cars decrease in value very quickly.
Deficiency lawsuits can result in what is called a deficiency judgment, a court order against the borrower. If you get a deficiency judgment after a repossession, this court order will make you responsible for payment of the deficiency balance. Both this and the repossession can create an additional debt burden and affect your credit score.
A lawyer for car repossession can represent you in this lawsuit and make sure you don’t miss any court deadlines. This is important because missing a court deadline can result in a default judgment. Default judgments end the lawsuit in the lender’s favor. In the case of car repossession, a default judgment will result in a deficiency judgment. This judgment might also allow lenders to garnish wages or seize other personal property.
It’s also common for lenders to ask for you to pay for all vehicle repossession costs since the lender most likely had to pay the repossession company to pick up your car. This usually becomes a part of the deficiency judgment. A lawyer can also help you negotiate payment of these costs.
A Lawyer Can Help You Weigh Your Options While Considering Bankruptcy
In many cases, if your car is being repossessed, you may consider filing for bankruptcy. Whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy will impact how you handle your car repossession. Although filing for bankruptcy sounds scary, it gives those going through financial difficulties more options to handle all their debts, including debt connected to a car repossession.
A lawyer can help you decide what kind of bankruptcy to file. They would also handle all the paperwork, represent you in court, and keep up with all deadlines related to the bankruptcy. Lawyers can help you with every stage of the car repossession process and bankruptcy. Having their expert advice and representation will reduce your stress and help you focus on moving forward.
Things a Lawyer Can’t Do in a Car Repossession
Although a lawyer can help you in many ways, it’s important to remember that there are things lawyers will not be able to change in car repossessions. Just like everyone else, all lawyers must follow the law and they can’t guarantee you a specific result, nor can they force lenders to simply stop the repossession.
Lawyers Cannot Change Contract Terms
When you sign a car loan, you are signing a contract that both you and the lender agree to be bound by. If you want to change those terms, the lender has to agree as well. A lawyer for car repossession can’t change any contract terms by themselves or force the lender to agree to any changes.
If you’d like to change the terms to a car loan, the lender will have to agree willingly.
Lawyers Can’t Control Court Proceedings
Although a lawyer can represent you in court proceeds, they can’t control everything that happens in court, nor can they control the judge. Judges have ultimate control over court proceedings. Further, lawyers can’t force them to take your side.
Most Lawyers Will Not Represent You for Free
Most lawyers will charge for their services. Lawyers typically charge on an hourly basis, especially if their services will not result in a money judgment for their client. Although the average rate is different in every state, lawyer fees are usually expensive.
Free legal assistance does exist, but services vary by state. Further, most legal services have strict requirements for who they’re able to represent. Those requirements are usually related to income, type of employment, and the kind of legal issue the client has.
Each state has a bar association that may be able to refer you to a local law school clinic that may provide free services or a pro bono clinic with volunteer attorneys. Local bar associations exist as well, depending on the city you live in. To find your local bar association, simply Google “bar association” and the name of the city you are in.
How To Hire a Car Repossession Attorney
Just like plumbing or finances, the legal issues involved in a car repossession require expertise, and people outsource this work more often than not. Hiring a lawyer will help you manage these legal issues the right way and reduce stress. Below are some tips for how to hire the right car repossession lawyer for you…
Hire a Specialist
If you would like to hire an attorney to help you with your car repossession, you have many options online. As you begin your search, however, make sure to look for a specialist who understands repossession law. That is, look for a bankruptcy attorney or a debt relief attorney local to your area. Not only will they know the law the best, but they will also have more experience dealing with lenders.
Take Advantage of Free Consultations
Lawyers will often provide free consultations to help you decide if you’d like to hire them and to get the basic facts of your case. A free consultation is a good opportunity to get a feel for the lawyer and also provide them with basic information about your case.
Make sure to bring all the documents you have to the consultation. This includes car loan statements, any notices you’ve received regarding the car repossession, receipts, or letters. You will also want to write down any questions you might have for the lawyer.
Ask Them About How They Charge Their Clients
Make sure to ask lawyers about how they will charge you for their services. Many law offices will have lawyers who charge different rates depending on their experience. Lawyers will typically let you know right away, as they would rather have their fees clearly known rather than having to deal with payment issues later down the road.
It’s a red flag if a lawyer is not upfront about how they charge for their services. Be wary of these kinds of lawyers.
Lastly, don’t be afraid to speak with two or more lawyers before deciding which one to hire, and make sure to take notes at each meeting. The earlier you find a lawyer, the more options you will have in an auto repossession process. You will also have more time to make decisions while your lawyer works on your case.
Dealing with a car repossession is a very stressful process, but you don’t have to do it alone. A lawyer will protect your legal rights, help you identify options, talk to the lender for you, save you time, and advise you on the best way to manage the next steps.
Further, if your car is about to be repossessed, you may be considering filing for bankruptcy as well. Again, bankruptcy can give you options to help you handle not just your car repossession, but also other debt. Upsolve can help you find a bankruptcy lawyer in your area.