Just the same as your home, the thought of car repossession is enough to drive you crazy. Even if this never comes to light, thinking that your car could be repossessed will have you looking over your shoulder at all times of the day.
There are many tips you can follow to help avoid car repossession, including the following:
- Negotiate with your lender: If you're facing financial trouble, call your lender and ask them if they can help. Banks are more likely to help you when you're open and honest, as opposed to hiding and hoping for the best.
- Offer a partial payment: Even if you can't pay in full, you may be able to buy yourself some time by offering your lender partial payment. This shows that you're trying to make things right, which is often enough for the lender to avoid repossessing your car (for the meantime).
- Sell your vehicle: If your vehicle is worth more than you owe, sell it and move on. Yes, this can make life difficult in regard to transportation, but it's better than falling behind, ruining your credit score and dealing with a repo man.
If you come to find that none of these options will better your situation, don't hesitate to turn your attention to the bankruptcy process.
Once you file for bankruptcy, the automatic stay will kick in. With this, your lender is not permitted by law to come after you for the money you owe.
Bankruptcy is a big decision, but if you can't afford your car payment, among others, it may be the best way to start fresh.