How Does Voluntary Repossession Affect My Credit?

voluntary repossesionWhen you get behind on your car loan, then technically the lender has the right to come and repossess your car. The reason why it’s called repossession is because the lender doesn’t have to go through the court system to do it. Instead, under the terms of your loan agreement, they can do it if you default on your payments. If you find that you can no longer make your car payments, though, instead of having the lender come repossess your car, you could turn it back into the lender is what is known as a voluntary repossession. There are many reason why you might want to voluntarily have your car repossessed, but there are some consequences associated with it as well.

Avoidance of Feeds

The main reason why people choose to have their car voluntarily repossessed is so that they can avoid the repossession fees. If your lender has to come repossess your vehicle, there are fees assessed for them doing so. When lenders repossess your vehicles, they don’t contact you. Instead, they send a towing company out to you to collect the vehicle, and that costs money.

Still Affects Your Credit

Even if you voluntarily repossess your vehicle, it’ll affect your credit. All the missed payments will go on your credit report as will the repossession itself. Furthermore, voluntarily repossessing your vehicle won’t cancel out your car loan. You’ll still be liable for paying it.

You Need a Brooklyn Bankruptcy Attorney

A Brighton Beach bankruptcy lawyer can actually assist you when you’ve reached this point. As soon as you begin having trouble paying your auto loan, you should contact a bankruptcy lawyer in Brighton Beach like the Ursulova Law Office. A bankruptcy attorney can recommend the best course of action to you, whether that’s to try to refinance your car loan or to file for Chapter 7 or 13 bankruptcy.

Ursulova Law offices, P.C.

Contact Ursulova Law Offices, P.C. to find out how our NY Bankruptcy Attorneys can help you today. Our offices are located in New York, Brighton Beach, Brooklyn and Garden City.


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