Vehicle repossession does not have to be inevitable

Like other areas of Mississippi, Southaven and De Soto have experienced their fair share of economic uncertainty. Residents are likely grateful for their jobs and the income they provide, but, at the same time, residents know that unforeseen events can always crop-up. One of the first areas often affected by personal financial setbacks is the personal or family vehicle. After a layoff, for instance, all it takes is a couple of missed payments, and one could be dealing with the threat of repossession.

Losing a car is the last thing a person needs during financial strife because, without transportation, it is extremely difficult to get back and forth to work or travel around to and from job interviews. Nevertheless, auto finance companies and creditors do not take missed payments lightly. Fortunately, there are steps a person can take to address repossession before it actually happens.

First, it is helpful to know that there are both voluntary and involuntary repossessions. Both negatively affect one's credit, but only one involves agents physically coming to take one's car away. In a voluntary repossession, a person chooses to give the car back themselves. Either way, repossession tends to be a last resort, especially since giving the car back does not mean the former car owner is relieved of their debt.

While it might seem obvious, there may be other ways to cut back on one's budget to make payments, or there might be ways to bring more money in. Another option is to discuss the situation openly with lenders to see if refinancing might be an option. Often, a refinancing decision is made on the basis of how much is owed on the car, the owner's credit history and the worth of the car. Lenders will take this into account, along with the owner's collateral as they formulate their response. In any case, communicating clearly and frequently with lenders is far better than ignoring calls or delaying contact.

A final option is to see if selling the car is possible. This will depend on the presence of interested buyers in the area and the condition of the vehicle, but it might prove feasible. Again, selling the car may be less financially destructive than missing payments and letting someone else auction it off.

Asset forfeiture can be an extremely tough subject to bring up, and it is usually best to discuss the matter with an experienced professional. While it is difficult and unpleasant to confront one's financial situation, facing things head-on is vastly preferable to facing more difficulty down the road.

Source: Rapid City Journal, "SPAIN: Options when you can't make car payments," Bonnie Spain, May 24, 2014

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