OneMain Financial is known as a consumer finance company, not a traditional bank. They specialize in providing personal loans to individuals who may not qualify for loans from conventional banks. If you have an auto loan through OneMain Financial, it’s crucial to understand their policies, especially concerning vehicle repossession.
OneMain Financial and Car Repossession: What to Expect
When you finance a car with OneMain Financial, your vehicle serves as collateral for the loan. This means that if you fail to meet your loan repayment obligations, OneMain Financial has the legal right to repossess your car. The timeline for repossession can vary depending on state laws and the specifics of your loan agreement.
While OneMain Financial typically doesn’t initiate repossession immediately after a single missed payment, persistent late payments or default on your loan significantly increase the risk. It’s important to be aware that some states have stricter laws regarding repossession. For example, in states like Mississippi, a vehicle can be repossessed as soon as the loan is in default, which could even be triggered by an unpaid late fee.
Can OneMain Financial Sue You for Loan Default?
Yes, OneMain Financial can pursue legal action against you if you fail to repay your loan as agreed. If you default on your OneMain Financial loan, they have the option to file a debt collection lawsuit against you. The goal of such a lawsuit is to obtain a judgment against you in court.
If OneMain Financial secures a judgment, they can then pursue various methods to recover the debt. One common method is wage garnishment, where a portion of your earnings is legally withheld to satisfy the debt. This can significantly impact your financial stability and make it challenging to manage your daily expenses.
Bankruptcy and OneMain Financial: Navigating Your Options
If you’re struggling with debt, including a car loan from OneMain Financial, bankruptcy can be a viable option to consider. Bankruptcy offers legal frameworks to manage and potentially discharge debts, providing a fresh financial start.
For individuals facing challenges with auto loans, Chapter 13 and Chapter 7 bankruptcy offer distinct paths:
- Chapter 13 Bankruptcy: This option can be beneficial if you want to keep your car while managing your debt. Chapter 13 allows you to reorganize your debts and create a repayment plan, often allowing you to catch up on missed car payments and retain ownership of your vehicle.
- Chapter 7 Bankruptcy: If you prefer to eliminate the debt associated with your car loan, Chapter 7 bankruptcy might be suitable. In a Chapter 7 case, you may be able to discharge your obligation to repay the loan, allowing you to walk away from the debt. However, you will likely have to surrender the vehicle.
Seeking professional legal advice is crucial to understand the best course of action for your specific financial situation. Consulting with a bankruptcy attorney can provide clarity and guidance on navigating these complex processes and making informed decisions about your debt and assets.
