Car Repossessions Rise Amid Covid With No Help Relief For Consumers
It was a Sunday night in August, just after midnight, when I was awakened by a loud banging. I opened the front door, ready to deliver a reminder about not forgetting the house key to my college graduate, COVID Class of 2020. Standing too close for comfort was a stocky, unmasked man with what looked like a Billy club in his hand.
Whats happening? I wailed, thinking it was a home invasion. Oh, Im onto your game, lady, he barked, adding that the car was going to be auctioned off as he headed to a tow truck that was already hooked up to my Ford C-Max. I trailed, pleading with him to please put on a mask as I whimpered, I dont understand.
Thats the scene that was unfolding as my child approached our home. Afterward, I sank to the floor of the kitchen, where I remained in an almost catatonic state for hours, repeating, Im so sorry, Im so sorry.
In a childhood marked by dodging creditors on my parents behalf, Id witnessed my share of economic ups and downs. Still, nothing stings like the humiliation of car repo, purposefully designed for maximum traumatic effect.
Lease extended during lockdown
Lenders can simply decide to auction a car off, as my repo man threatened. At auction, cars regularly sell for a lower amount than the purchase price on financing agreements. Guess who is on the hook to pony up the difference?
Years before her vehicle was repossessed, Annabelle Gurwitch did commercials for Ford.
Shadowy scourge of repossessions
Repossessions Credit Reporting & Credit Scores
Vehicle repossessions carry negative weight on credit reports. Consumers must check their reports for accuracy and determine whether the lender has listed the payment history, loan status or balance owed in error. To obtain a current copy of your credit report from Transunion, Experian or Equifax consumers may write to the credit bureau or visit: annualcreditreport.com.
When errors appear on credit reports, the consumer must send a written dispute to the bureau. The dispute must be accompanied by supporting documents that illustrate the error. The credit bureaus have 30 days to respond to the written dispute.
Auto loans that have fallen into default, and ultimately the vehicle is repossessed, a negative listing will appear on the borrowers credit report. The lenders tradeline may be listed on the reports for 7 1/2 years from the date the last payment was made. This listing will factor in to a lowered credit score and make it difficult for the borrower to secure favorable terms on loans going forward.
S To Take Before Your Car Is Repossessed
What can you do if you think your car or truck may be repossessed? According to Ryan Kelly, acting auto finance program manager at the CFPB, you should:
Active duty military members have additional protections under the Servicemembers Civil Relief Act.
Read Also: How To Remove Scratch From Car
Understand How You Can Buy Your Car Back At Auction
If the lender is planning to sell your car, theyll likely sell it at a public auction. You, like any other member of the public, have the right to bid on your car and you might get a great deal. People go to auctions because organizations like police agencies and lenders want to get whatever they can for the cars theyre auctioning. In reality, however, if you couldnt keep up with monthly payments, you likely wont have the cash to buy it back in full.
Communicate Before You Miss A Payment
If youre sure you cant make the next months payment, the worst thing you can do is nothing. Just by reaching out to your lender, youre making a statement that youre being proactive, that youre not just going to stop answering the phone and disappear into the wind, and that youre a borrower worth working with. Youre far from the only person having trouble keeping up with payments. They might offer to let you defer on or even skip a payment or work out some other solution with you but only if you take action before you miss a payment.
Recommended Reading: How To Turn On Car Without Key
Ask Your Lender To Reinstate The Loan
If youre able and willing to pay the loans arrears and all the affiliated costs, but not the outstanding balance of the loan, your lender might be willing to reinstate the loan, which is different than redemption. You would essentially pay the back balance and go back to where you started with the loan. Your state might have laws giving you the right to reinstate or reinstatement protection might have been written into your loan. Either way, the lender has to inform you in writing if you have the right to reinstate and, if so, to give you an associated quote. As with redemption, time is of the essence with reinstatement, and youll have to get in good standing within a certain time period.
What Happens With The Property After It Is Repossessed
If you do not redeem the property, it will likely be sold at an auction or a private sale. You have the right to advance notice of the time and place of any public sale. If it is a private sale, you are entitled to notice of the date after which a private sale can be made. The proceeds of the sale first pay the cost of the repossession, storage of the property, preparation for sale, and the costs of the sale itself. Any remaining proceeds after the sale are used to pay the debt. If the proceeds from the sale dont cover the costs, the creditor can file a lawsuit against you to make up the deficiency. If any money is left after the sale and debt, the creditor must pay it to you.
Also Check: How Much Does It Cost To Get Your Car Wrapped
How Do I Get Personal Property From My Vehicle After Its Repossessed
A creditor cant keep property left in a vehicle and must use reasonable care to prevent others from removing your property. Ask for your property to be returned. If your property is not returned, you can file a lawsuit in small claims court for the propertys fair market value at the time of the loss.
What To Do If Your Car Has Been Repossessed
Your car has been repossessed. Now how do you get it back?
After taking possession of your car, the lender begins the process for recouping the money you still owe on the car loan, plus any fees incurred think towing, storage of the vehicle, re-keying the car and legal fees.
The best way for the lender to get that money is to sell the car, often through an auction. So youll have to act fast if you want your car back.
You have a few options some are less costly than others, but none are particularly easy:
Reinstate your loan.
Pay the past-due amount, plus any late fees and repossession costs. You get your car back and resume paying your car loan.
Redeem your loan.
If you had enough money to pay off your loan in the first place, you probably should have done this before the repo company took your car. But if you pay off the loan and all fees, you get your car back free and clear of any loans.
Give up your car, then buy it back.
The lender will sell the car, typically at auction, to get some of its money back. Its technically possible for you to buy back your car by bidding on it at auction, but youll still be responsible for paying your old loan, plus all those fees.
If youre unable to come up with the money to get your car back, the lender will use the proceeds from the sale to pay off what you owe. If the sale price is less than your loan balance plus any fees, the difference is called the deficiency balance. Thats the amount youll be responsible for paying.
Also Check: How To Get Rid Of A Car That Doesn’t Run
Businesses In Every State Closed Despite Ppp Loans
Permanently closed businesses and retail stores are seen in Downtown Manhattan, New York City on November 11, 2020.
The Wall Street Journal has done the groundwork that might help you to localize a story about how the first round of Payroll Protection Program payments was not enough to keep hundreds of businesses running in a pandemic.
The Journal took the list of the biggest borrowers provided by the Small Business Administration and compared that list to recent bankruptcies. Half of the bankruptcies have been filed since August. The Journal found, Dozens of recipients, which come from nearly every state, cited the pandemic as a primary reason for entering bankruptcy.
About 300 companies that received as much as half a billion dollars in pandemic-related government loans have filed for bankruptcy, according to a Wall Street Journal analysis of government data and court filings.
Many of the companies, which employ a total of about 23,400 workers, say the funds from the Paycheck Protection Program werent enough to keep them going as the coronavirus and lack of additional stimulus payments weighed on their businesses.
What About Hiding The Property To Avoid Repossession
If you hide the property, you are violating your agreement with the creditor, which requires you to make the property available upon demand. You could also be subject to criminal charges. It is a crime to conceal, remove or harm property on which there is a lien with the intent to hinder enforcement of the lien.
You May Like: How Often Change Air Filter Car
Having Trouble Making A Payment Talk To Your Lender
In hard times, a number of people tend to overlook their car payments in favor of more critical purchases. This is understandable, but it could harm your credit in the long run. Don’t be afraid to call your lender. Others are in the same predicament, and lenders may be able to offer reduced payments or give you an extension. This communication is important to show that you are committed to paying the loan and keeping the account in good standing.
Car Repossession: What Can You Do Before During And After
How can your bank, credit union or leasing company possibly have the right to take back your vehicle? Read your loan agreement.
An auto loan contract states if you fail to make a payment and the process can legally start after one missed payment the lender has the right to take back your car.
But will a lender really take your car if youre late on this months payment? Its unlikely, according to Bruce McClary, vice president of communications for the National Foundation for Credit Counseling in Washington, D.C.
State rules vary on how a lender can repossess a vehicle, and some have placed limits on repossessions in response to COVID-19. Find your states rules on the National Consumer Law Center website.
The efforts to repossess your car typically start after youve missed a couple of consecutive payments, he said. If you miss two payments, you should start getting a little bit concerned, and if you miss three payments and your car is still sitting in your driveway, you may not have much more time.
Depending on where you are in the car repossession process, you do have options for keeping your car and more of your money.
Also Check: How To Remove Smoke Smell From Car
Zoom Builds In New Zoombombing Protections
Zoombombers have interrupted school classes, church meetings and public hearings. Now, Zoom says it is rolling out some new protections. The new features include a one-click pause and quick removal of the disruptive participants. By clicking Suspend Participant Activities, all meeting features will cease, including screen sharing, recording and breakout rooms.
Zoom also announced that its new At-Risk Meeting Notifier scans social media posts and other public online activity to find shared Zoom meeting links. When the tool detects a meeting that looks to be at high risk of being disrupted, it automatically alerts the account owner by email and provides advice on what to do, the company says. These steps could include deleting the vulnerable meeting and creating a new one with a new meeting ID, enabling security settings, or using another Zoom solution, like Zoom Video Webinars or OnZoom.
Ask The Lender If They Plan To Sell Your Car
After repossession, the lender might keep the car as compensation, but if youre not able to redeem or reinstate, its much more likely that theyll sell it to try to recoup some of their losses. Some states require lenders to tell you if theyre going to sell the car, and if that sale is a public auction, when and where its going to take place. Others do not, but its always a good idea to ask so you can know what is in store for your cars future.
Read Also: How Many Times Can I Refinance My Car
The Cdc Emphatically Says Stay Home For Thanksgiving
The Centers for Disease Control and Prevention moved from advising to more like imploring Americans to stay home next week.
Dr. Henry Walke, the CDCs COVID-19 incident manager, told reporters:
Amid this critical phase, the CDC is recommending against travel during the Thanksgiving period. Were alarmed. What were concerned about is not only the actual mode of travel whether its an airplane or bus or car, but also the transportation hubs that were also concerned about.
Just as the CDC said stay home, United Airlines, Southwest Airlines and American Airlines said Thursday that people have been cancelling travel plans for next week and that new bookings are dropping.
It is going to be interesting to see traffic flows on Wednesday evening, the day before Thanksgiving, next week. You probably remember this mind-blowing video of Los Angeles freeways on the evening before Thanksgiving last year.
Contact A Chicago Creditors Rights Lawyer
The rules have changed for what creditors are allowed to do during the COVID-19 pandemic. If you act like everything is business as usual, you risk violating one of these new rules, which may lead to fines or other punishments. An Illinois creditors rights attorney at Walinski & Associates, P.C., can check that all of your debt collection practices are in compliance with current state and federal laws. Schedule a consultation by calling 312-704-0771.
You May Like: How To Reset Car Bluetooth
Consumer Rights In Auto Repossessions
Before a lender can repossess, or take back your car, you must have used your car as collateral for the loan and you must have defaulted on your contract with the lender. Usually, when you borrow money to buy a car, you have to use the car as collateral. If you do, your contract will say what constitutes a default, allowing the lender to repossess the car. Your rights and the rights of the lender when it comes to default and repossession are laid out in the contract you signed and in state and federal law.
So, make sure you read your contract carefully, especially the part that talks about default. Usually, default is defined as the failure to make a payment when it is due, but many contracts also say that other things may be a default. The most common of these things are: taking the car out of state permanently without permission from the lender, or failing to keep insurance on the car, or damaging the car so that its value is reduced.
If you fail to make a required payment on time, the lender must send you a “Notice of Right to Cure” the default. This Notice can only be sent once you are more than ten days late and it gives you 20 days to catch up your payments. Please note that federally-chartered credit unions are exempt from this law, and many federal credit unions will not send a Right to Cure in all cases.
For more information on auto repossessions, visit the Department of Consumer Affairs website at www.consumer.sc.gov or call 800-922-1594.
Outbreak Aboard Navy Destroyer
Sailors man the rails on the guided-missile destroyer USS Michael Murphy, Wednesday, Sept. 2, 2020, in Honolulu, Hawaii.
A fourth of the sailors on the Navy destroyer USS Michael Murphy tested positive for the coronavirus. Unlike the outbreak that happened on the USS Roosevelt aircraft carrier when it was at sea, the latest outbreak happened with the ship docked in Hawaii.
The Department of Defense only provides general data on COVID-19 infections and does not reveal information about specific military installations.
Read Also: How To Keep Car Doors From Freezing
What Will The Lender Do After Repossessing Your Car
The lender can keep the car or sell it to satisfy your loan obligation. Each state has its own rules regarding sale procedures and notice requirements. However, you usually have a right to know when and where the sale will take place. Also, your lender must sell the car in a commercially reasonable manner. This generally means the lender has to follow standard sales practices, but it is not required to obtain the highest possible price. You might have a claim for damages or a defense against a deficiency if the sale wasn’t commercially reasonable.
