Voluntary Repossession is Still Repossession
Before you decide whether you are going to let your lender repossess your car or if you are going to give it up yourself, you should understand that a voluntary repossession is still considered a repossession. When you take out a car loan, the car is the collateral. If you default on the loan, the car would be taken. If you choose to wait for the lender to repossess your car, it can be taken at any time of the day. Oftentimes, it is taken at an inconvenient time, like before you have to go to work. When you have your car repossessed voluntary, you can schedule a time for the vehicle to be taken, but you have still defaulted on the loan. Therefore, it is still considered a repossession.
Voluntary Repossession Saves Money
When your car is repossessed, the lender will send an agent out to tow your vehicle to a car lot. Each day the car is there you would be charged for storage. The towing and storage costs are not something that the lender would cover. These are fees can really add up, especially if it takes the lender several days to get the car out of the lot. You would also be charged to get your belongings out of the vehicle. If you voluntarily give your car up, you can avoid the tow truck and the lot fee. You will also have time to remove your belongings on your own. You can contact your lender, and schedule a time and a place for you to drop off your vehicle.
Voluntary Repossession Saves Your Credit Score
Before you make the decision between repossession and voluntary repossession, you are likely asking yourself, “how will voluntary repo affect my credit?” The answer to that question is that it will have a negative effect. Unfortunately, any type of repossession is considered a default, and it will have a negative effect on your credit report. If you give up your vehicle voluntarily, the lender may be willing to work with you. You can tell them that if they no longer report missed payments, that you would turn in the vehicle quickly. Most lenders would be willing to work with you, because a voluntary repossession can save them money.
Voluntary Repossession Relieves Stress
When a lender is trying to contact you regarding a repossession, it can be a very stressful time. They will call you at home and at work. They will send letters every day and constantly harass you. There is also the fear of wondering when they will show up with the tow truck to take the car. This can result in a great deal of stress. When you voluntary relinquish your car, it can make things less stressful. You can arrange to make payments and you can take the care in yourself. This can make things much less stressful.
There is a Chance that You Can Keep Your Car
If you consider a voluntary repossession, there is a chance that you may be able to keep your car. If you contact the lender regarding the repossession, they might offer you a new payment schedule, which will allow you to catch up on your payments so that you can keep your car. This won’t always happen, however, there is a chance. If you really want a way to keep your car, this is the best way possible.
Bankruptcy and Repossession
If you are planning on filing for bankruptcy, you can offer to give up your vehicle voluntarily. If you want to keep your vehicle, you have two other options. First, you can redeem. This means that you would need to pay off the vehicle at the present-day market value in one lump sum. You can also reaffirm. This is where you and your lender would sign a contract, saying that you can keep your vehicle on two conditions. First, you would agree to keep up with all of your payments, and second, you would agree to accept full liability for the debt. This means that you would not be able to discharge the debt that you owe during the bankruptcy proceedings. If the judge who is presiding over your bankruptcy proceedings does not believe that you can financially afford to make your car payments, you may still be required to relinquish your car. It all depends on your current income and financial situation. If your financial hardship resulted from a divorce, you should consult a family lawyer in Rancho Cucamonga.
Having your vehicle repossessed can be a very difficult time. If the vehicle gets repossessed while you are at work, it can be very embarrassing. Having the lender contact you at work can also be very embarrassing. If you know that you are going to eventually lose your car, the best thing that you can do is give it up voluntarily. Not only will it prevent you from feeling stressed out or embarrassed, it will also save you money. Before you decide what you are going to do, it is important that you understand that a voluntary repossession is still a repossession.