Financing or leasing is often an easier way to get a vehicle in Minnesota. Doing that means the lender has an interest in the car if you default on your monthly payments. This could lead to vehicle repossession – but what if you believe that repossession is wrongful?
Understanding vehicle repossession
If you miss out on payments toward your vehicle, the lender can seize it. This is because your contract states that defaulting can result in repossession. Lenders are not permitted to breach the peace by threatening force against you, but they can take it from your garage.
Sometimes, wrongful repossession occurs when you have missed a single payment toward the vehicle. Lenders must notify you before they seize your vehicle. If they don’t do that and a repossession agent takes the vehicle, they are in violation of the law and your rights.
How to get your vehicle back
If you defaulted on your loan, the lender has options other than repossession. Missing a single payment shouldn’t automatically result in vehicle repossession. The lender could offer you a chance to pay off your balance before resorting to that. However, there are steps you can take to recover your car. You can redeem it by paying off your entire loan balance, arrears and repossession fees.
Reinstating the loan also helps to recover your vehicle. Continue making regular loan payments and avoid defaulting on any future payments.
Another option is to buy back the vehicle at auction. However, if you win, you will still have to pay off any balance on the loan that you previously owed.
Finally, filing for bankruptcy before the auction results in an automatic stay, which prevents the car sale. With Chapter 13 bankruptcy, you get between three to five years to pay off your debts, which can help you keep the vehicle.
Communicating with the lender can help if you’re behind on your car loan payments.
