What to do after a car repossession?

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Car Repossession 101 Note: Do whatever you have to do to avoid your car being repossessed selling the car yourself, or if you need it, pawning possessions, getting loans from family, or getting multiple payday loans (if you have a steady job, you can get one from each different company in your town regardless of your credit). Lenders can be pretty merciless after repossession.  Your Rights After repossession understand that the only "right" you have is the right of redemption. Meaning you have the option of immediately paying all back payment, late fees AND the full balance of the loan plus repo fees, and any other fees they add, getting your car back, and saying "so long" to the lender. However, if you could afford this you wouldn't have gotten behind on your payments so, more than likely, you will be seeking a reinstatement of your loan, since as far as the lender is concerned your loan is over (you defaulted). Reinstatement is only a "right" in a few states. In most states, such as Colorado, this is solely at the discretion of the lender.  IF YOU DO NOTHING Some people think because the lender takes the car they no longer owe or have to pay. WRONG! You didn't borrow a car you borrowed money and the loan was "secured" by the vehicle. Two facts that seem illogical and surprise people
  1. The lender will sell your car quickly, probably at an auction open to car dealers only, for much less than it is worth, less than you could have gotten for it, and almost always less than what you owe (balance of loan plus all the fees).
  2. The lender will come after you for whatever is owed on the loan and fees after the car sale --no matter how small the balance. Think wage garnishment.
 WHAT TO DO If you need your car and can't afford to pay off the entire loan then you must act quickly and remember you are now at everyone else's mercy (lender, repo company) so be humble.
1.Confirm your car has been repossessed
  • Call the police non-emergency number in jurisdiction where car is registered, tell them you think your vehicle has been repossessed and give license plate number. Most states require repo companies to report the cars they've repo'ed to the police within an hour after seizure. If it has been reported, the police will give you the name and phone number of the repo company (usually not the address). Do this even if even if you've already gotten repo confirmation and a phone number from your lender. Lenders deal with big national repo companies that farm work out to local repo/towing businesses. You may get one name and a toll-free number from the lender but a different name and a local number from the police. Local numbers are easier to Google and hopefully you can find out where your car is and how easy or hard it will be for you to get to. You may be surprised to find the lot is a long way away or in walking distance from your house.

2. Do not attempt to pay your outstanding balance the way you normally do by internet or electronic funds transfer it's too late for that. All monies paid going forward must be paid in cash.
3. Call your lender (have a fax number ready and know your monthly gross and net incomes)
  • Have a reason why you fell behind like a temporary loss of pay due to prolonged illness, but do not say someone lied to you, or you weren't notified etc. (now's not the time). Say an emergency kept you from honoring your payment arrangement or say you didn't realize the payment hadn't cleared, whatever just keep it simple.
  • If Chase Auto Finance (CAF) is your lender they will forward you to the redemptions department (a.k.a. recovery unit) at 888-895-1728. Their business hours are until 6 PM (Eastern) and they're closed Weekends, so if your car is taken on Friday afternoon you will not get it back under any circumstances before Monday.
  • Find out what the requirements are for reinstatement. CAF requires payment of any late payment and late fees and repo fee ($300-$400); a copy of the binder or disclosure page(s) of your auto insurance policy showing you have full coverage and showing Chase as the lien holder (they do not accept insurance ID cards for this purpose); two most recent pay stubs; and a filled-out Customer Information sheet that askes for name address, phone #, and relationship for 4 references (none may live with you-2 family members and 2 not). CAF will fax the blank reference sheet to you, and all documents must be faxed tback to them at 813-217-9643. They use an e-fax system so whatever agents you speak with throughout the process will be able to see what documents have been faxed.

4. Find out the total of all payments, fees, and charges the lender requires and ask them what the fees of the repo company are likely to be. You will have to deal with the repo company and their fees separately, but you can get an idea from the lender.
5. Make a case for reinstatement
  • Include a cover letter with your faxed documents letting the lender know why they should expect you to make payments on time when you did not do it before. Keep it short but demonstrate 1) that you have the ability to pay the loan (steady income, new job, end of crisis that caused delinquency) and 2) things will be different going forward. Tell them you're getting debt counseling, you are setting up direct payment, you have a part-time job, etc.
  • Many pay stubs/statements are confusing. Some show allotments to savings accounts as deductions from your gross and not part of your net pay. Make sure to point out what your monthly gross income (full pay) and net income (amount you take home after taxes and deductions) are. If you get paid bi-weekly (every two weeks) don't assume the lender agent making the decision about your reinstatement will realize this when looking at your pay statement and do the necessary multiplication. Write out your monthly gross and net income on each pay statement and include it in your cover letter requesting reinstatement. The person you deal with on the phone at this point is likely the one making the decision.
 If your lender agrees to reinstate your loan 1. Get all of the money for back payment and fees
  • Don't trust any payment arrangement you can't get in writing. You also will have a hard time getting the same person on the phone ever again, so the only way to ensure reinstatement and ensure your car is not sold at auction is to try and pay everything at once. If you absolutely cannot get all the money you owe within 10 days (the time in most states before your vehicle is sold at auction) try to make arrengements using an employee of your bank or credit union branch as a go-between (see below).
  • CAF requires cash payments at a Chase Bank branch but be sure to keep your receipts because your Chase auto loan account no longer exists on the branches computer system or on the system you have internet access to. You will have to read the branch #, transaction #, session #, and teller name off the receipt to the recovery unit agent THEN they will have to call the branch to confirm your payment. OR the best way to handle this is to go in the branch and ask to speak with a "personal banker" (the people at the desks to the side). Explain your situation and that you want to do everything correctly to get your car back. Ask them to call the Recovery Unit and ask how much you owe. Let the banker take your payment behind the counter and get a receipt. Then have the banker call the Recovery Unit back to confirm the payment while you're sitting there. Politely ask the agent if they will be notifying the repo company of the release right away because you are getting a ride out to the repo lot and want to make sure you'll be able to get your car before close of business and won't be stranded.

2. Find out how much the repo company will charge you. Charges may include a cleaning/administration fee ($40-$80), one-time item storage fee ($10-$30), daily vehicle storage fee ($15-30 per day). Plan to pay them in cash and have exact change (this is usually a tow lot). If you can't get your car right away call the repo company and make an appointment to get your things (yes they will require an appointment and don't be late). They may not tell you where they're located until you make an appointment.  Once you've been reinstated and paid the lender The lender must send a release to the repossession company. Often the lender contacts the headquarters or parent company of the repo/towing company that has your vehicle. The repo/towing company will not release your vehicle to you until they get the release from their HQ or parent company. They don't answer to your lender, only their HQ or parent company.
Even though you've paid the lender, getting your car back depends on:
1. lender sending release notice to repossession company
2. Reposession company processing release in their system and notifying the repo/towing company that has your car
3. Paying the repo/towing company's fees in cash, in full.
Once you've paid, as long as it is not the end of the business day, your car could be released in as quickly as an hour, but you should count on 1 1/2 to 2 hours. Ask the repo/towing company if they will please call you when they receive the release.
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