We all face financial hardships at one point or another. Sometimes, these financial difficulties can make it difficult to keep up with a loan agreement. Missed payments can give creditors the power to seize your personal property, including your car. But how long does a repo stay on your credit report? Vehicle repossession can also have a major toll on your credit and may stay on your credit history for years. However, certain car repossession loopholes may help you.
You may have heard of some car repossession loopholes that would keep a repo man from accessing your car, but many of these tactics could land you in legal trouble. However, there are other, more effective car repossession loopholes that you can take advantage of. The lawyers at O’Bryan Law Offices can help you avoid repossession and even provide you with legal counsel if you are the victim of unlawful repossession. Call us at 502-400-4020 to schedule a free consultation with a member of our team.
What Can You Do to Avoid Car Repossession?
There are many different ways to hide your car from the repo company threatening to repossess your car. Some people decide to sell the car and transfer ownership to another person so that the vehicle’s title is no longer in the debtor’s name. Others hide their car in a closed garage or remove the car’s GPS tracker to make it harder for the repossession agency to find the car.
Transferring ownership of the car to someone else, hiding your car, or removing your car’s GPS tracker could keep your car out of the repo company’s hands for a short time, but these car repossession loopholes could eventually land you in serious legal trouble.
The best way to prevent car repossession is to pay the remaining balance on your car loan or make regular payments towards your loan. If you are unable to repay your loan or other auto loan refinancing options just won’t work, you could file for bankruptcy.
A bankruptcy filing could help you avoid car repossession and prevent debt collectors from pursuing legal action against you. An experienced Louisville bankruptcy attorney like the ones at O’Bryan Law Offices can help you keep your car or get your car back in the event of a repossession.
What Is Wrongful Repossession?
Wrongful or improper repossession occurs when a repo agency seizes your vehicle when you are not in default, meaning you are not behind on your loan payments. Your car can also be wrongfully repossessed if the auto loan company uses physical force to seize your car or breaks into your private garage to gain access to your car. If you believe you have been a victim of illegal repossession, call O’Bryan Law Offices today at 502-400-4020 so we can discuss your case.
When Can a Car Be Repossessed?
A creditor can repossess your car if your loan is in default, meaning you have an outstanding balance on your car loan that hasn’t been paid. Because Kentucky law doesn’t specify how many loan payments you have to miss before a creditor can have your car repossessed, you could miss one car payment and be in default.
What Are Deficiency Balances?
A deficiency balance is the amount of money remaining on an outstanding loan after the creditor sells the collateral attached to the loan. For example, if your car is repossessed, your creditor can sell the vehicle to help cover your past-due payments. If the price of the car doesn’t entirely cover the unpaid loan amount, there may be a deficiency balance remaining on the loan. The creditor could file a deficiency judgment against you, making you financially responsible for the remaining balance. The deficiency would also stay on your credit report until it is completely paid off.
Can I Surrender My Car to Avoid Repossession?
Yes, if you have an outstanding loan balance, you can surrender your vehicle voluntarily rather than wait for a repo man to come and repossess your car in front of your neighbors or coworkers. While this can help you avoid some embarrassment, it will most likely not affect how the repossession appears on your credit report. Many credit unions view voluntary repossession and non-voluntary repossession the same, meaning your credit score won’t benefit from a voluntary car repossession.
Can My Car Still Be Repossessed if I Make Partial Payments?
Yes, if you cannot pay the full amount on the payment date outlined in your loan agreement, your loan could be in default, and you could have your car repossessed. If you are unable to keep up with loan payments, you could talk to your lender and negotiate a lower payment amount. Otherwise, partial payments may not protect your car from repossession.
What Happens if You Hide Your Vehicle from Repossession Agents?
There are some sneaky ways to temporarily delay any repossession efforts. One way to prevent car repossession is to hide your car in a locked garage or remove the car’s GPS so it can’t be located. While hiding your car may delay the repossession process, it could force your lender to seek legal action against you. Your creditor could obtain a court order that would require you to surrender the vehicle. Additionally, the lender could require you to pay court costs in addition to the missed payments, which would cost more money in the long run.
If you have an outstanding car loan balance and are facing repossession, it’s important to know your legal rights. Below are some of the things a repo man is allowed to do, as well as what state laws prevent a repo man from doing. If you believe your car has been illegally repossessed, you should call a skilled Kentucky law firm to represent you and protect your interests.
What Can a Repossession Agent Do?
Under car repossession laws, repo agents are allowed to seize your car if it is listed as collateral on a secured loan, like an auto loan. A repossession company will usually find the address of the borrower and try to locate the car. Not everyone wants to give up their car, however, so they may resort to hiding their car inside a garage or with another person. In this case, the repo agency might have a tougher time locating the car and may have to resort to other tactics.
In Kentucky, repo agents can seize a car on private property, but they may not breach the peace. This means they cannot enter a locked area of the home to seize your personal property without a court order. A repo agent can, however, monitor your home, learn your schedule, and have your car seized when you cannot avoid repossession, like when you’re away from home or your car is parked in the driveway rather than the garage.
What Can’t a Repossession Agent Do?
A repo man cannot repossess the car if you are not behind on your car payments, or if you have your car parked inside of a private garage. If you have your car hidden inside a garage, a repo agent cannot break into the garage to have your car seized. Additionally, a repo man cannot repossess your car by using physical force.
What if I Think the Repossession Was Illegal?
If repo agents tried to repossess your car while it was inside a locked garage, you may be able to pursue legal action against the repossession company. Any unauthorized entry of your private property is illegal, even during the repossession process. At O’Bryan Law Offices, we’re prepared to help protect you and your property from unlawful repossession. Contact us online and let us know how we can help you.
How to Avoid Car Repossession in Kentucky
While there are some sketchy ways to avoid repossession, there are several car repossession loopholes that are entirely legal and may help you keep your car or even get your repossessed car back. These repossession loopholes can include paying the entire loan amount, refinancing your loan, negotiating with your creditors for more manageable monthly car payments, and more. These options could also prevent creditors from taking legal action against you.
Become Current on Late Payments
One way to prevent repossession is to catch up on any missed payments on your auto loan. If you are able to catch up on your car payments using one lump sum, you can prevent yourself from being in default, which can then stop the entire car repossession process. While it may be difficult to pay the remaining balance on any missed monthly payments, if you can pay your lender a lump sum, you may be able to keep your car or even get your car back from the repo agency.
Reinstate Your Car Loan
Borrowers with outstanding loan payments can reinstate their car loans, which could help them recover their car after repossession. With the lender’s permission, you can pay the outstanding balance on the loan (and the repossession costs) to reinstate your car loan and get your car back. After the loan has been reinstated, you would go back to making monthly payments towards your new loan.
Negotiate with Your Creditors
Another way to avoid the car repossession process is to negotiate with your creditors on your loan. This can include asking for lower monthly payments that would allow you to cover the costs of living while also making timely loan payments. Creditors may allow you to pay less per month or lower your interest rate in order to avoid paying repossession costs and/or paying for a court order.
Additionally, you may want to negotiate with one or all three of the major credit reporting agencies to see if you can rebuild your credit score or erase any car repossessions from your credit report. If your credit score is high, future lenders may be more likely to approve you for loans.
Refinance Your Car Loan
Borrowers can also prevent repossession through loan modification and refinancing. Making modifications to your loan agreement can help lower your monthly car payments, lower your interest rates, or even lower the amount of the entire loan. Refinancing auto loans allows borrowers to ensure they can make their payments on time and in full, which can protect them from car repossession and help protect their credit score.
In order to qualify for loan modification, you must prove that you cannot cover your current monthly payments, but that you have the means to cover future payments. For example, you may be able to present your creditors with copies of any medical bills you’re currently paying. This proves that you are facing temporary financial hardships and could benefit from refinancing.
File for Bankruptcy
If you are facing major financial problems and cannot pay your auto loan, you may want to consider filing for bankruptcy. While it may seem scary, bankruptcy can be a great debt relief option, and one of the advantages of bankruptcy is that it can help you avoid repossession altogether. Below are the two chapters of the bankruptcy code that most people with auto loans choose to file under, Chapter 7 and Chapter 13. Both bankruptcy and repossession affect credit reports, but there are ways to restore your credit and improve your credit history after filing for bankruptcy.
File for Chapter 7 Bankruptcy
If you cannot make payments towards your car loan, you may want to consider filing for Chapter 7 bankruptcy, also known as liquidation bankruptcy. Under Chapter 7, borrowers list out their personal belongings, and those assets are sold to pay their debts. Under federal and state laws, certain assets are exempt from liquidation up to a certain amount. Bankruptcy offers borrowers a fresh start, and these exemptions allow borrowers to retain certain necessary assets to reasonably get by.
Under federal law, you are exempt from up to $4,000 in motor vehicle equity. This means that if you use federal bankruptcy exemptions, and your car is worth less than $4,000, you may be able to keep your car. However, if you file for Chapter 7 and your car is worth more than $4,000, a bankruptcy trustee will sell the car, give you the $4,000 exemption, and distribute the remaining funds to creditors. The funds from the sale can be used to pay your creditors for the remaining loan balance or to cover any applicable fees like car storage fees or repo fees.
Regardless of whether or not you can keep your car, if you file for Chapter 7 bankruptcy, your entire car loan debt will be erased, and you will no longer be responsible for any previously missed payments. Additionally, any other outstanding debts would be erased in the process.
In order to file for Chapter 7 bankruptcy, you must pass a means test, which compares your income to the state’s average income to determine if you are financially unable to pay off your debts. If you earn more than the state’s average income, you would not be eligible to file under Chapter 7 and may have to file for Chapter 13 bankruptcy.
File for Chapter 13 Bankruptcy
If you cannot file for Chapter 7, you may want to file under Chapter 13. Chapter 13 bankruptcy allows borrowers to restructure their debts. They will not have their assets liquidated, but they will be on a new repayment schedule to ensure their creditors are paid in full. While Chapter 13 would require you to pay for all past and future loan payments, you could avoid car repossession altogether.
Deciding to file for bankruptcy is difficult, which is why the skilled bankruptcy lawyers at O’Bryan Law Offices are here to help you file correctly and effectively. We can help you file for either Chapter 7 Bankruptcy or Chapter 13 bankruptcy, depending on your specific circumstances. Call us at 502-400-4020 to explore your options and learn more about car repossession bankruptcy.
What Is the Statute of Limitations on Car Repossession in Kentucky?
The statute of limitations is the amount of time someone has to file a lawsuit on a particular issue. The statute of limitations on car repossession in Kentucky is four years, meaning your lender has four years from the date the loan would have been paid off (or the date the car was repossessed) to sue you for any remaining balances.
Notably, the statute of limitations only applies to lawsuits and not repossession, meaning if the borrower defaults, a repossession agency can still seize their car even after the statute of limitations expires. If your lender sues you for loan payment, call the car repo attorneys at O’Bryan Law Offices today at 502-400-4020.
What Are Your Rights as a Borrower?
As a borrower, it’s important to understand your car repossession rights. Laws protecting borrowers vary from state to state and can be difficult to understand. If you are interested in refinancing or reinstating your loan, filing for bankruptcy, or you’re facing legal action, call an experienced legal professional to inform you of your rights as a borrower. They can also give you expert advice on how to legally protect your assets and even defend you against wrongful repossession.
Right of Redemption
Under Kentucky law, you can reclaim a repossessed car up until the repossession company decides to sell the car. This means that if your car was repossessed and you reinstated your car loan before the car was sold, you could get your car back from the repossession agency. It may be difficult to catch up on late payments and cover repossession costs on short notice, but it allows you to recover your repossessed vehicle.
Contact O’Bryan Law Offices Today to Save Your Car
The easiest way to avoid repossession is to pay the outstanding loan amount, but that’s not always possible. Our law firm is proud to offer assistance to those facing repossession or who are unable to pay their monthly loan payment due to financial hardship or other unforeseen circumstances.
We can help you protect your car from repossession, represent you in cases of unlawful repossession, and provide you with the legal services you need to file for bankruptcy. If you are unable to avoid repossession, we can inform you of your right to repossession and help you get your car back. Credit counseling services can also help those looking to improve their credit reports after repossession or bankruptcy.
If you are interested in refinancing your auto loan, pursuing legal action against a repossession company, or filing for bankruptcy, an experienced bankruptcy lawyer from O’Bryan Law Offices can provide you with the legal guidance you need. Call us at 502-400-4020 to schedule a free consultation with one of our attorneys.