How Many Vehicles Are Repossessed?
You probably know that if your vehicle is repossessed, you will lose the vehicle as well as any payments you’ve made. If you can’t make a vehicle loan payment, you’re probably struggling with debt, and you need the advice and services of a North Carolina repossession attorney.
In 2021, about 2.2 million personal vehicles were repossessed in the United States. That totals more than 5,400 repossessions every day. Even more repossessions may be happening soon, because the self-driving vehicles that will soon be available are also self-repossessing vehicles.
What are your legal rights if your vehicle is repossessed by a lender in North Carolina? What can you do to keep your vehicle from being repossessed? How will self-repossessing vehicles work, and what will you need to know about them?
For the answers to these questions, keep reading this brief discussion about technology, vehicle repossession, and your legal rights as a consumer. You will also learn why and when you should ask a North Carolina repossession lawyer to advise you and work on your behalf.
What Are North Carolina’s Rules Regarding Repossession?
Lenders in this state may repossess a vehicle after a borrower misses only one payment. The law doesn’t require a lender to notify you before repossessing your vehicle. If you hide the vehicle or lock it in a garage, a repossession company may ask a court to order you to surrender the vehicle.
North Carolina does not allow a repossession agent to breach the peace or to use threats or acts of violence to repossess a vehicle. If your personal items are in the vehicle when it’s repossessed, you will need to make an arrangement with the repossession company to recover those items.
After a repossession, the vehicle may be sold at auction to the highest bidder, but if the amount of the sale is less than the amount you owe, the difference is called a deficiency balance, and you will still owe that amount to the lender.
How Will Self-Repossessing Vehicles Work?
Lenders already use ruthlessly efficient repossession technology. Some towing companies use digital cameras and computers to identify and locate vehicles to be repossessed, so it’s almost impossible to hide your vehicle and hope that a repossession will just go away. It won’t.
And lenders may soon be taking advantage of technology that will make vehicle repossessions even easier and less costly – for them. In the near future, if you miss a payment on your car loan, your car could drive itself back to the lender.
The Ford Motor Company has developed self-driving technology that can move a vehicle from your driveway back to the repossession agency or to the lender with no need for a tow truck or a driver. Ford applied for a patent for this technology in 2021.
If the vehicle cannot be moved because it’s blocked or because it’s locked in a garage, the Ford system can lock the owner out or immobilize the vehicle while the repossession company seeks a court order to recover the vehicle.
Can You Prevent a Repossession?
Some states give you a period of time to make a past-due payment before your vehicle may be repossessed, but North Carolina is not a “right to cure” state for vehicle repossession. Your contract with your lender determines if you can cure a default by paying the past-due amount.
If something has changed that affects your monthly income – your employment, a serious illness or injury, or a divorce, for example – and you do not think that you can make a payment on time, talk to the lender or ask your attorney concerning options.
If it’s going to be impossible for you to catch up on your payments, selling the vehicle may provide the money you need to pay off the loan. A repossession will damage your credit score, but selling the vehicle will not.
How Will a Vehicle Repossession Affect You?
A vehicle repossession can inconvenience you immediately if you do not have alternative transportation for school, work, or child care. A vehicle repossession will also:
- damage your credit score
- impair your ability to qualify for a loan
- appear on your credit report for the next seven years
- exacerbate your difficulties if you are already struggling with your debts
If you simply cannot make your vehicle loan payments, and if the repossession of the vehicle is imminent, the smartest step you can take is promptly contacting a North Carolina repossession attorney.
Your attorney can discuss options to protect the vehicle. Lenders often work with borrowers to agree on a new payment arrangement, but if you are absolutely unable to make payments under any arrangement, you may have to consider the bankruptcy option.
What Should You Know About Bankruptcy?
For some North Carolina consumers, filing for bankruptcy before your vehicle can be repossessed may be your only realistic and practical choice for holding on to the vehicle.
As soon as your petition for bankruptcy is filed, the court issues an automatic stay that prevents any creditor from repossessing your vehicle or taking any other collection action. Lenders can be penalized by the court if they violate your automatic stay.
Bankruptcy is generally the last resort, but if your North Carolina repossession lawyer advises you that bankruptcy is your best option, that lawyer will explain how bankruptcy works, help you with the paperwork, and guide you through the process.
If your vehicle has been repossessed, a chapter 13 bankruptcy may provide a way for you to have the vehicle returned to you if you act promptly and a Chapter 13 bankruptcy is filed before the vehicle is sold at auction because the automatic stay prevents the vehicle from being sold.
Choose the Right Repossession Attorney
If your vehicle is about to be repossessed or has been repossessed or if you are overwhelmed by debts that you cannot pay, the award-winning legal team at Gillespie & Murphy will:
- protect your legal rights
- explain your legal options
- deal with a lender on your behalf
- help you file for bankruptcy and guide you through the process
You can’t make informed decisions about repossession or bankruptcy without the advice of a knowledgeable repossession or bankruptcy attorney. Know your options. When you become our client at Gillespie & Murphy, you’ll be treated with dignity and respect and offered every courtesy and consideration.
We have offices in Wilmington, New Bern, Greenville, and Jacksonville. If your vehicle is going to be repossessed or has been repossessed or if you have debts that you simply cannot pay, arrange now for a no-cost, no-obligation legal consultation with an attorney at Gillespie & Murphy by calling 252-636-2225.