Just because you are in a large amount of debt doesn’t mean that you have to have your car repossessed. There are legal ways to avoid car repossession; you just have to know what steps to take. Here is advice that you would get from a car repossession attorney at Kain + Henehan.
Refinance the Vehicle Loan
If you paid for your car with a vehicle loan that you cannot afford, then the best way to avoid car repossession is to find a way to end the loan quickly. You can refinance the vehicle loan that you cannot afford with one that you can. If you have made payments on the previous loan, then you should only need to take out the amount to close the loan. In theory, it should be smaller than the loan that you have. Just make sure that the payment terms are affordable so that you can get out of this situation.
Pay Off the Loan Somehow
If you can’t take out another loan, then you still want to pay off this car loan somehow. If you can increase your income, that would be the best solution. Otherwise, consider picking up a second job or selling things that you don’t need to make extra payments. Paying off the loans means that they can’t take the car because you no longer owe on it.
Sell The Car
If you can’t find another way to pay off the loan, sell the car for as much as you can get. Then, use the funds to get a significantly cheaper vehicle (as affordable as you can get) and pay off as much of the loan as possible. This is a drastic step, and you want to make sure that you get rid of as much of that loan as possible so that you can eventually pay it off with your income. Then, avoid this problem in the future by only buying cars you can afford or already have the money for.
File Bankruptcy
If all else fails, you may be able to file for bankruptcy. This is the method of last resort, and you should probably wait until all of your finances are so difficult to recover that you don’t have other options. You can only file bankruptcy once every seven to ten years, depending on which version you use. It will also significantly damage your credit in the process.
However, your car cannot be repossessed if it meets certain criteria once you file for bankruptcy. It must be your vehicle (not a work vehicle) that is in your name and under a certain value. Bankruptcy laws protect your vehicle from repossession, among other assets, so that you can still get to work and manage your life.
Discuss Your Options With a Car Repossession Attorney
If you are in such a bad financial situation that you may lose your car, it is time to start talking to a car repossession attorney or bankruptcy attorney. At Kain + Henehan, we work with clients just like you to handle serious financial issues through bankruptcy and possibly other means. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form to schedule a consultation.
