When you fall behind on auto loan payments, it is natural to seek solutions and weigh your options. Knowing that repossession could happen at any time or place, it might occur to you that you could be left without transportation. This could leave you unable to travel to work or other places. Keep in mind that if you simply allow the vehicle to be repossessed, you will still be responsible for the full amount of the loan to the creditor. This is because debts are not automatically settled upon repossession.
While it certainly does not seem fair for a creditor to be able to claim the full amount of the debt while also possessing the property, it is the creditor’s legal right. Typically, the vehicle is sent to auction. If the sale price does not cover the amount that is still owed, you are liable for the balance that remains. In addition to that difficulty, the experience of a repossession can be embarrassing and distressing.
Georgia Repossession Process
Understanding the repossession process begins with clarifying the type of debt that is involved. Unsecured types of debt include personal loans and credits cards. Secured types of loans are those in which there is collateral. In the case of auto loans, it is the vehicle that serves as collateral. If you default on the loan contract, a creditor in Georgia can repossess the property, and it can be done without the creditor coming directly to your home. The creditor might hire a company to recover the vehicle. These types of businesses are sometimes called repo companies, and they are the parties that locate and retrieve repossessed vehicles. They can take the vehicle from places such as your home, shopping centers or place of employment. Once they have recovered the vehicle, it is taken to a storage lot.
At that point, you will be informed of your opportunity to pay the debt before the before the vehicle is presented for sale at auction. The entire balance that remains on the contract is usually the requirement for paying the debt and having the vehicle returned. If repossession has already occurred, there is little time remaining at that point to settle the debt.
Chapter 13 Bankruptcy
If paying the remainder of the debt completely is not possible, bankruptcy might be the only path available to choose. Chapter 13 bankruptcy ceases the repossession and allows you to keep the car. Depending on your situation and potential qualification, bankruptcy also might provide the opportunity to lower your car payments, interest rate and overall balance. Because it can result in criminal and civil penalties, hiding the vehicle is not recommended. It will only delay repossession, and would likely result in the filing of a Complaint for Personal Property Foreclosure and a court order to present the vehicle. Because the vehicle is the collateral that secured the loan, the lender has the right to repossess it when you default on the loan.
It is important to act quickly if you are behind on your auto loan payments and face repossession. Losing your vehicle even for a short time can be highly disruptive to your life. You risk losing your job when you have difficulty going to work. Your ability to act in the event of emergencies is impaired, and you lose the ability to get places when it is necessary. To explore your options for keeping your vehicle, contact Blevins & Hong. Call us at (678) 354-2290 for information about customized debt resolution.