The COVID-19 pandemic brought unprecedented financial challenges for many, leading to job losses, reduced income, and difficulty in meeting financial obligations. If you were struggling to keep up with your car payments during this time, you might have wondered: can they repo a car during a pandemic? The answer, unfortunately, is often yes. Despite the widespread financial hardship, auto repossessions continued, and it’s crucial to understand your rights and options.
The Reality of Repossessions During COVID-19
While some lenders offered temporary pauses on repossessions at the height of the pandemic, these protections were often short-lived or not universally applied. As the article from ConsumersLaw.com points out, the rate of repossessions remained concerning even during COVID-19. Many state-level protections designed to help consumers navigate pandemic-related financial difficulties eventually expired, leaving borrowers vulnerable.
Even when borrowers requested payment deferrals or lower payment plans due to pandemic-related hardships like unemployment, childcare costs, or missed work, vehicle repossessions still occurred. Lenders, focused on recovering their financial interests, often initiated repossession processes even with a single missed payment.
When Do Lenders Decide to Repossess Vehicles?
It’s important to understand that lenders primarily focus on payment, not the reasons behind late payments. Decisions to repossess are frequently automated. Lender’s computer systems are designed to trigger repossession processes swiftly, sometimes after just one missed payment. These systems electronically send repo orders to agents and simultaneously report negative payment history and repossession notations to credit bureaus.
What to Do If You’re Facing Repossession
If you’re facing the threat of car repossession, taking proactive steps is crucial. Here are three key actions to consider:
1. Contact Your Lender Immediately
Your first step should be to contact your lender. Whether it’s a large bank, a credit union, or a subprime lender, reach out to discuss your situation. Inquire about the possibility of postponing payments, negotiating a revised due date, or adjusting the payment amount. Crucially, ensure any changes to your loan terms are documented in writing. Verbal agreements are not sufficient; you need written confirmation of any modifications from your lender to protect yourself.
2. Explore Loan Refinancing Options
Consider refinancing your auto loan. Explore options with other reputable lenders to see if you can secure more manageable terms. Refinancing could potentially lower your monthly payments or adjust the loan duration to better fit your current financial situation.
3. Seek Legal Guidance
For expert advice and to understand your rights fully, seek legal guidance from experienced consumer protection attorneys like Flitter Milz, P.C. They specialize in representing consumers against financial institutions regarding wrongful repossession and violations of borrower rights. Consulting with legal professionals can provide clarity and potential avenues for recourse.
MOST IMPORTANTLY: Do not ignore the debt. Ignoring the situation will only worsen it. Actively seek a solution by exploring the steps above and communicating with your lender.
Your Rights After Repossession
Borrowers have specific rights even after a vehicle has been repossessed. It’s important to be aware of these rights, which include:
- Wrongful Repossession: Was your vehicle repossessed by mistake or in error?
- Breach of the Peace: Did the repossession agent use aggressive tactics, violence, or damage your property during the repossession process? Repossession agents must not breach the peace while taking your vehicle.
- Improper Notices: Lenders are legally required to provide proper notifications after repossession, including details about the sale of the vehicle and your rights. Did you receive these notices?
- Credit Reporting Errors: Review your credit report for inaccuracies related to the repossession.
Repossession and Your Credit Score
Vehicle repossession has a significant negative impact on your credit report and credit score. Repossessions are reported to credit bureaus and remain on your credit history for a substantial period.
Credit Reports: Repossessions are negative marks on your credit report. Carefully review your credit reports from Transunion, Experian, and Equifax to check for accuracy. You can obtain free copies of your credit reports annually at annualcreditreport.com. If you find errors in payment history, loan status, or balance owed related to the repossession, you have the right to dispute these errors in writing with the credit bureau. Include supporting documentation with your dispute. Credit bureaus have a timeframe of 30 days to investigate and respond to your dispute.
Credit Scores: A repossession resulting from a defaulted auto loan severely damages your credit score. The negative listing from the repossession can remain on your credit report for up to 7.5 years from the date of your last payment. This will significantly lower your credit score, making it more challenging and expensive to secure loans or credit in the future.
Seek Legal Help After Repossession
If you believe your car was wrongfully repossessed or your rights were violated during the repossession process, seeking legal help is advisable. Firms like Flitter Milz are nationally recognized for their expertise in consumer protection law and handle cases of wrongful vehicle repossession against banks, credit unions, and financial institutions.
Contact Flitter Milz for a free legal evaluation to determine if your consumer rights have been violated and explore your options for legal recourse. They can help you understand your rights and navigate the complexities of repossession law.
Pictured: Cary Flitter (center), Andy Milz (left), Jody López-Jacobs (right).
