What means Repossession?

Repossession represents an action where an auto lender can take back the ownership of your vehicle. The vehicle Repossession laws vary by state, however, the purchase contract of your vehicle should include indications regarding how and when your auto lender can repossess your vehicle. Though, is some cases, the Repossession can happen without the auto lender warning you upfront or having permission from the court.

Most often, the Repossession happens due to retentions on your auto loan payments. Your auto lender may be authorized to begin the Repossession process right after the first missed payment, if this is indicated in the contract.

Which are the types of Repossession?

The legal practices recognize two types of Repossession – the voluntary and the involuntary Repossession. The Voluntary Repossession represents the process of voluntary return of the property back to the auto lender, as a reason might serve the fact that you are no longer financially capable to proceed with the monthly payments.

Nevertheless, the most common type of Repossession is the Involuntary Repossession. It represents the process when the auto lender takes the car from your property without your permission, if they manage to do it not disturbing you or your neighbors in the process.

An important thing to mention is that if your property was repossessed - whether voluntarily or involuntarily - your auto loan is not cancelled. You'll still owe the balance due on your auto loan even after the vehicle is repossessed. By means, your auto lender is entitled to continue collecting on the auto loan by calling you, sending letters, or using third-party debt collectors. They can even start a lawsuit referred to your delinquency, through which they will be able to request the payment of the amount past due and the Repossession costs.

Another option would be that your lender may sell or auction your vehicle, however, if the obtained amount will not fully cover your loan, you will still owe them the difference.

How does Repossession affect your Credit History?

Repossession lowers your credit score. Moreover, it is considered to be one of the worst factors that influence your credit history. First come the late payments that led to the Repossession, which will lower your credit score after they're reported to the credit bureaus. After comes the Repossession itself, which will be listed in the public records section of your credit report.

If the lender obtains a deficiency judgment for the balance of the auto loan, that judgment will also go on your credit report. If there is a collection associated with the deficiency judgment, it will lower your credit score as well.

The Repossession and all of the associated negative items will remain on your credit report for seven years, even in the case of a Voluntary Repossession.

How to repair your Credit Score after Repossession?

There are some regular practices that you might be able to apply by yourself, that might help you improve your credit score after a Repossession, within which: paying off the remaining loan balance, keeping safe your other accounts and always making in time payments etc.

However, there are some cases when the Repossession is being reported erroneously. The furnishers are not a reliable source of information, since they replicate whatever is in their system. This is the case where our partners, as licensed attorneys will be more than glad to help you. It is your right to dispute the mistakes that the furnishers indicate in your Credit Report, and they always do their best to make this happen, so that you could get back your good Credit Score and History, and even get financially compensated for the suffered inconveniences. And you take no penny off your pocket, since they get paid straight by the CRA’s when the lawsuit ends successfully, because!

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