If you're a few years out of bankruptcy and facing financial difficulties again, it can be disheartening. For debtors who reaffirmed a car loan or took on a new car loan after their bankruptcy discharge, unemployment, underemployed or a medical crisis can bring on a slew of issues including vehicle repossession. So how do you cope when you're facing car repossession and you don't have the option to file bankruptcy again?
Below are a few tips:
- The first thing a post-bankruptcy debtor should do is face the fact that they are having issues early. If you've been keeping a budget, then you will be able to see problems before they arise. If you just lost your job or received a pay cut then you know that you may have issues paying your car note. Don't ignore that reality.
- Contact the lender and find out if they can modify the loan or somehow give you a little more time to earn more money so that you can pay the car note. What post-bankruptcy debtors don't want to do is ignore the lender and then start paying late or skipping payments. The lender will either say yes or no, so don't be afraid to at least ask.
- If you are unable to get concessions from your lender, consider selling the vehicle. You'll get a lot more money if you sell it yourself then if they sell it after repossession. But whatever you do make sure that you sell the vehicle for enough money to cover the outstanding loan balance.
- If you are unable to sell your vehicle or if the lender has already repossessed the car, you need to find out if you will owe a balance. Even after the lender sells the car at auction there could still be an outstanding balance on the loan which they will expect you to pay. Under normal circumstances you would be able to discharge this balance in bankruptcy; but if you recently exited bankruptcy that won't be an option.
- If you owe a balance and are unable to file bankruptcy, try to work out a payment arrangement with your lender so that you can repay the balance and avoid future lawsuits and garnishments.