The basics of vehicle repossession

One of the worst things that can happen to a driver is falling behind on car payments. In Mississippi, cars are essential for getting to work, transporting family members and simply carrying on with day-to-day living.

Being without a car is what often befalls those who become too far behind on their vehicle payments. When one finances or leases a car, their creditor holds crucial rights. These rights conclude when the car is paid-off, but until then, drivers must understand and acknowledge these rights. Unlike other assets, such as a home, vehicles can often be seized by creditors without a lengthy legal process or warning in advance. This is known as repossession and usually happens after the driver has missed a number of payments.

Often, a vehicle can be seized as soon as default occurs. Different contracts may have different stipulations as to what constitutes default, so it's important to review this information while signing the original loan or lease contract. Sometimes, contract information can be altered during the course of a loan or lease; creditors must abide by these new official terms rather than those of the old contract.

Repossession agents can legally enter a person's property in order to seize the vehicle. However, they cannot "breach the peace," or create a disturbance or damage property in order to take the car. Agents who do commit a breach of the peace may have to pay the person damages and may also be limited in collecting deficiency judgments. These types of judgments usually surface when the creditor attempts to collect the difference between what was owed on the contract and the amount the creditor received for selling the vehicle after repossession.

Asset forfeiture is a frightening reality for those who are struggling with overwhelming debt. Personal bankruptcy can stop repossession and also help with other threats to personal property, including foreclosure. Consulting with a qualified bankruptcy attorney can help a debtor keep their vehicle as well as their ability to earn a living and get back on track financially.

Source: Federal Trade Commission, "Vehicle Repossession," accessed Oct. 11, 2014

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