Repossession occurs when you fail to make your auto loan payments on time. It is the lender’s main course of action it can take against you.

The North Carolina Department of Justice explains you should try to fix the situation before repossession occurs by reaching a new agreement with your lender. If you do this, get it in writing because the lender can continue to use the agreement. If repossession occurs, the creditor has certain rights.

Prior to repossession

Your creditor does not have to alert you to a repossession. As soon as you default on your payment agreement, the lender has the right to take back the vehicle. However, the creditor only has the right to take the vehicle within the scope of the law. For example, they cannot break into your garage to get the car.

If you know a repossession is possible, then you should clean it out. Your lender cannot keep anything you leave in the vehicle, but they also do not have to make it easy for you to get your items.

After the repossession

After the creditor takes your vehicle, you may be able to get it back by paying any owed money. If you fail to do this, your creditor has the right to sell it. At that point, the lender can continue to try to collect what you owe minus what it makes through the sale.

It is much easier to prevent repossession than to deal with the aftermath. If you think you are in danger, you should try talking to your creditor.