Can debt collector or attorney repossess car without judgement?
No. The debt collector or attorney can only take car voluntary. So if the customer hands over the car, he is doing it voluntary. Not many people know that this is a voluntary repossession. It is your choice to hand over your car. It is not for the debt collector to decide. He cannot force you to hand over your car and he may not intimidate you to hand over your car. It is against the rules of the Council of Debt Collectors to intimidate the customer to hand over your car.
What should I do when debt collector calls?
It is important to remain calm and in control of the situation, but don’t be rude. Show the debt collector that you know your rights. You know you have defaulted on your monthly payments, but the debt collector must give you time to pay the arrears or apply for debt counselling, or give you time to think about voluntary repossession. The debt collector cannot tell you that he will come to collect the car in 24 hours. He cannot do this without a judgement order.
The debt collector demands the arrears or the car. What should I do?
Some debt collectors will demand the arrears to be paid or the car. Some of them will give you a time limit to produce the arrears or car. Some debt collectors will make you think that this is your only options. It is not! They cannot take the car without a court judgment. The creditor must send you a final 30 day demand and then a 14 day demand. Then they will issue you with a summons and then you can still go and defend yourself in court.
How long does it take for credit provider to repossess car?
Your creditor will call you after 1 or 2 missed payments. If you give a valid reason for your missed payment, like losing your job, they will give you more time. After 3 months of non payment, the creditor will hand your account to the collection department. After another 1-2 months your account will be handed to an attorney to issue final reminders and prepare papers for summons. The court will hand judgement. The attorney will get attachment order and ask Sheriff to collect car. The complete process time will vary depending on turnaround time of each department. As soon as there is a judgement against you name, the creditor may keep you liable for 30 years.
How can I prevent repossession of my car?
The only way the bank will stop the legal action is if they get back all the outstanding arrears on the account. You can always contact your creditor and make arrangements how you will be repaying the arrears. Your creditor might say pay your arrears over 3 month, but include the normal instalments as well. When you are facing cash flow problems, this option will not be possible.
The second alternative, is to apply for debt counselling before you get a summons from the creditor. The debt counsellor will notify the creditor that you have applied for debt counselling. The creditor must stop all legal action immediately and negotaite a new payment plan with the customer.
What is the disadvantage of voluntary repossession?
Voluntary repossession is when you hand over the keys to your car to a debt collector or creditor voluntary without a court order/judgement. The disadvantage is what happens after the repossession. Your creditor will take back the car and sell the car to recover the outstanding debt. Repossessed cars are normally sold an auction. Cars are sold below market value and sometimes below outstanding balance on account. The customer will be kept liable for the difference. The customer can negotiate with creditors how to repay outstanding amount. If customer cannot repay the outstanding debt, the customer can apply for debt counselling and place debt under debt review.
What is the advantage of voluntary repossession?
Voluntary repossession is when you hand over the keys to your car to a debt collector or creditor voluntary without a court order/judgement. The advantage is that you will not have a judgement against your name on your credit history. A judgement can take 5-10 years to remove from your credit file. This can have a devastating effect on your ability to find credit in the future.
Any other questions?
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