Understanding Repossession in California
Most people believe that if they are late with a car payment or miss one month, their lender will not take any drastic actions. Because of the number of cars, loans, and late payments, there is some truth to this belief. However, under the law, a lender has the right to repossess your vehicle, without notice, if you are one day late on a payment.
Unlike most other creditors, if you fall behind on your car payments, your lender is not required to give you any notice that they intend to repossess the vehicle. Your car could be repossessed at any time, on any unsecured street, parking lot, or driveway. Your presence is not required. Many people go to sleep only to find that their car is gone the next morning.
Once your car is repossessed, you will be notified within 48 hours of the repossession. The notice will include your lender’s contact information and the agency that repossessed your car, along with an inventory list of personal property in the vehicle. Additionally, you will be informed of how much it will cost to regain possession of the vehicle, including storage fees and other related charges.
Filing Bankruptcy to Prevent Repossession If you are behind on your car payments, filing for bankruptcy will prevent your lender from repossessing the vehicle. It does not matter if you are one day behind or six months. However, whether you should file and what chapter of bankruptcy depends on your circumstances. Some of the questions are California bankruptcy lawyers will ask include the following:
How far are you behind?
Do you have the money to pay it back?
Do you have any other outstanding bills or debts?
Do you want to keep the vehicle? The answers to each of these questions will inform the advice our firm would provide. For instance, if you were only one month behind and had no other debts, the cost of filing for bankruptcy would probably be more than your car payment. However, if you are a month behind and have a significant amount of unsecured debt that you are struggling with, filing for bankruptcy might be more beneficial. Furthermore, if you decided you did not want to keep the car because you could not afford it going forward, filing a Chapter 7 case could allow you to surrender the vehicle while discharging the remaining balance. A Chapter 7 could also protect you from repossession if you could pay the default in twenty or thirty days after filing.