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Working with creditors to stop vehicle repossession

When Florida residents deal with financial problems, they tend to focus on ways to alleviate debt or obtain a fresh financial start. There can also be a fear of asset forfeiture. If a consumer fails to make payments on an automobile lease or loan, they could face vehicle repossession. Those currently dealing with automobile repossession, or those who fear that they could have their car repossessed, should understand how they could stop repossession.

When a consumer decides to finance or lease an automobile, they are afforded rights by the creditor or lessor. But, when the consumer fails to make timely payments, these rights end and, in turn, the creditor or lessor could be granted the right to repossess the vehicle. In these situations, consumers facing repossession should understand that the rights afforded to creditors and lessors are limited, and that they still have consumer protection rights and there are methods to keep their vehicle.

First, a consumer could work with the creditor or lessor to change their payment plan. This negotiation process could result in a new agreement that fits the needs of the consumer, but also gets the creditor their money. If an agreement is reached with a creditor and changes are made to the original plan, it is important to get these changes memorialized in writing and signed. This ensures it is valid and enforceable.

Next, if a vehicle has been repossessed and the creditor has decided to resell it, the consumer has two options. First, they might be entitled to buy back or redeem their vehicle. This means paying past due payments and the entire remaining debt, including fees and expenses incurred in the repossession process. Or, they could buy back their vehicle by bidding at the repossession sale. Second, in some states consumers are allowed to reinstate their loan. This means that they pay the amount that is past due on their loan, along with any expenses incurred by the creditor.

Dealing with debt can be difficult. Losing a vehicle to repossession could make an already difficult situation tremendously more challenging.

Source: Federal Trade Commission, "Vehicle Repossession," accessed Feb. 3, 2015

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