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If you have a debt that is secured by property such as a car, furniture or equipment, if you fall behind, the creditor has a right to take the item back into possession. In the State of Georgia, the law states that if the debtor is late on car payments or has defaulted on the lease or finance contract, the creditor holds the right not only to repossess the car but sell it and also sue the debtor for the rest of the debt. This means that the debtor not only loses his or her car but also has to shell out either from wages or bank account to fulfill the debt.

However, you can prevent repossession in Georgia by filing bankruptcy. This will provide you with a structured repayment plan and reduce the balance and interest rate you need to repay.

Car Repossession Lawyer

The Impact of Repossession on Your Credit Rating

Repossession is defined as a legal process through which the creditor takes possession of your car or any other asset pledged as collateral in case of a default by the debtor.

Simply stated, repossession can drive your credit to the ground and with it your business. It can cause a 100-point drop in your credit score. What’s more, late payments, collections, and public records will stay on your credit for about seven years. This can make it hard to get another vehicle, credit, or even a checking account.

Your Rights Regarding Repossession

If you get more than 10 days late with a payment, your creditors may begin contacting you and seeking to repossess the vehicle. However, if your creditor is a large bank, it may wait for a minimum of 90 days or more before repossessing, others may wait up to 60 days.

However, your creditors cannot resort to harassment by sending bullies or musclemen to seize your car. Creditors cannot cause a breach of peace since they have to act according to the state law.

The repo laws of most states allow creditors to repossess your car at any time. They can do this without notice and also take it from your property. However, the creditors cannot enter your garage or call the police for assistance. And while it may seem like a great idea to put your car in a garage and lock the door, this can technically get interpreted as hiding your car from creditors and can be grounds for criminal penalties.

Although a repossession company or loan company will not be able to cut chains, break locks or damage property to repossess your car, in some states hiding a car from the repo is a crime.

How to Avoid Vehicle Repossession

Chances of defaulting on timely payments due to no fault of yours cannot be ruled out. However, in the event of such inadvertent default, it is best to appraise your creditor and make alternate arrangements for payment. In most cases, creditors remain supportive and agree on payment, rather than repossess your vehicle.

However, there are ways in which you can stop car repossession or minimize its chances:

  • Pay the full amount of the defaulted payment.
  • Seek shorter loan terms that are always quicker to pay off. The payback duration of auto loans has grown from four years to as much as seven years. However, your best option is to go for a loan plan of no more than 50 months or 5 years.
  • If all else fails, file for bankruptcy. This will prevent creditors from being able to repossess your car and can even get it back if it was already seized.

How Does Bankruptcy Work to Avoid Repossession?

You need to file a Chapter 13 bankruptcy within 10 days of repossession to brighten your chances of getting it back. Chapter 13 plan also helps reduce the debt to the ‘fair market value’, if your car loan is more than 910 days old.

Even if you cannot afford to make a Chapter 13 payment to keep your car, don’t offer voluntary repossession to your creditors, since this has adverse ramifications. A better option is to file a Chapter 7 bankruptcy and surrender the vehicle. This will prevent the creditors from being able to collect on the remaining debt, called a “deficiency balance.”

If you want to prevent or delay car, van, or truck repossession in Atlanta, Georgia, contact our experienced car repossession attorneys as soon as you can. They will offer sound debt solutions since they know the ways to get you out of debt and save your car from being repossessed. We offer both in-person or virtual meetings to discuss the best options for your individual needs.

The Ultimate Guide to Atlanta, Georgia Bankruptcy

This website has all the information you need to know about filing for bankruptcy in the State of Georgia. Start by deciding which form of bankruptcy you want to learn about: Chapter 7 or Chapter 13. Then, use the table of contents to navigate the page. There’s a lot of detail here so please contact our law firm with any questions that come up. We’re here to help you reset your debt using the best type of bankruptcy for your individual situation. We offer both in-person and virtual consultations, whichever you are more comfortable with.