Are you starting to get a little panicked inside every time you spot a tow truck in your rearview mirror? If you’re behind on your car payments, you probably have good reason to be nervous. You never know when someone might be following you with an order for repossession in their pocket.
So, what are your options?
First of all, you can’t legally hide your car from the finance company to avoid a repossession, so don’t even think about it. Second, there are much better (and less-stressful) options available. You can:
Ask the finance company for a break
The odds are high that you’re not in a position to refinance if you’ve been missing payments. You may, however, be able to ask for accommodations from your current finance company.
If your financial troubles were the result of something very temporary, and you can afford your current payment, see if the company that holds your car note will let you tack the missing payments onto the end of your loan or make them up a little bit at a time over the next several months. The odds are high that they’d rather have you pay than take your car.
Consider filing for bankruptcy
If your financial situation is really rocky or outright dire, it may be better to consider filing for bankruptcy. Whether you file Chapter 7 or Chapter 13, an automatic stay goes into effect once you file that prohibits creditors from proceeding with collection efforts — including repossessions — until the stay is lifted.
If you file Chapter 7, that may only buy you time before an eventual repossession — but you can use that time to put the money together for a different vehicle.
Alternately, if you file Chapter 13, you will be able to keep your car by making a plan to repay the arrearages in your bankruptcy. You may also qualify for a reduced loan if your car note is at least two years old and you owe more than the car is worth.
