Auto finance companies can repossess your car if your are late, they don’t have to wait a certain period of time to do so. Partial payments won’t typically slow the repossession process down and pleading your case to the lender doesn’t guarantee that they will wait forever.
If you are unable to catch up the car payments and the car is repossessed, the “repo man” can’t “breach the peace” however. Generally, this means that he can’t:
1. forcibly remove you from the car 2. force you to stop 3. break into property in order to get the car 4. pretend to be a law enforcement officer 5. threaten you or assault you
If any of the above occur, it is probably wise for you to step away and call the police.
If you want to save the car you may have one of the following options:
1. Ask the lender for a deferment
In the short term, lenders will often agree to move a payment or two to the end of the loan.
2. Ask for a modification
Ask the lender to restructure the loan perhaps by extending the length of time to repay and reducing the monthly payment.
3. Refinance the loan
Still have a good credit score? Give it a shot in an attempt to reduce the monthly payment.
4. Request a waiver of late fees
5. Use Bankruptcy
A chapter 7 filing will stop repo activity and you may be able to obtain a reduction in the principal balance and or interest rate via agreement with the lender or if the car is worth less then what is owed via the “redemption” process. A redemption in a chapter 7 bankruptcy allows you to pay the market value of the car and treat the remainder of the loan as unsecured debt.
A chapter 13 filing will stop repo activity, allow you to get the car back that has been taken if filed promptly, restructure the loan by forcing a payment over three to five years of the remaining balance at what is often a reduced interest rate. It may also allow you to pay only the value of the car over that same period if it is worth less then what is owed.