car repossession (ad)gif”>
How Repossessions Work When a debtor misses enough payments, the repossession process is legal right for the bank to take away his car without notice But after a repossession, most states require lenders to provide certain notices that give you the opportunity to retrieve your vehicle.
Pre-recovery notice process
First default: Miss a payment and lenders can automatically start the repossession process without alerting borrowers first.
State laws: A few states require that lenders send notices to explain the terms of missed payments and allow borrowers to remedy their defaults before repossessing.
Post-Repossession Notices
First Notice: A notice sent within five days of repossession that informs the borrower of their rights to redemption or reinstatement of the loan12.
Second Notice: Second notices are often sent out 14 days after the initial notice is sent and they reiterate that the lender will sell (repossess) if you do not take action.34
What the Borrower Can Actually Do
Reinstatement: Typically, a borrower has the right to bring a loan current for 15 days after being notified of his or her intention to foreclose on an overdue amount plus ancillary fees2.
Redemption – Borrowers can pay off the entire loan balance plus any repossession-related fees before a vehicle is sold45
Voluntary Surrender- If unable to pay borrowers can voluntarily return the vehicle, which may help reduce future financial ramifications harasses 6
Borrowers who may face repossession need to be aware of these processes and timelines. This can have a significant effect on how difficult it will be to keep their car.
