At this point, we have been over medical debt and credit card debt, so now we are going to open the next can of worms: car repossession and bad auto loans. Car repossession happens way more than you would expect. Did you know that even if you are on the verge of having your car repossessed, we can protect you from the repo man, and possibly even recover your car if you've just had it taken? Before we can work on your behalf though, you need to understand some things.
Subprime borrowing can lead to some sub par financial situations, so try to avoid it.
Subprime borrowing is basically where a lender provides a loan to someone who has less-than-ideal credit. If your credit score is sub par, you might also find yourself at risk for subprime borrowing on auto loans.
That's why I want to provide you with some really good articles to begin with so you have a better idea of some things you can do before you become subjected to the terms and conditions of just another horrible loan.
Thebalance.com offers a great avenue for financial well-being and empowerment. THIS article from the website does a great job explaining what subprime borrowing is and 4 ways you can try to avoid it. While subprime loans aren't always avoidable, you best believe that there is a huge market for it among predatory lenders. And if you're not careful, you will find yourself prey to outrageous interest rates, processing and application fees, or origination fees. Just remember, when you accept the terms of a loan that you cannot afford, you're setting yourself up for a rocky down slide that requires an eventual bail-out. If you take out a loan, knowing in the pit of your stomach that you will default on your payments if hardship is to occur, you are going to have a very difficult time crawling out of that hole you're putting yourself in.
On the other hand, read THIS article by Donna Fuscaldo to get a list of some questions to ask yourself before accepting terms from subprime lenders. Like I've said many times before, you quite possibly have no other options, but you must exhaust all other prospects beforehand. Fuscaldo includes the important aspects of borrowing like understanding what a predatory lender is and knowing what your personal responsibilities are when you seek the best loan for you. Pulling out new loans in desperate times isn't just about satisfying the most urgent need at that very moment. Tempting as it may be to just settle, try to withstand the muck, look at your best long-term options in spite of the mess, and don't sell yourself short.
Once you find yourself falling behind on your car payments, you might find yourself running from the repo man.
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I have heard it all. I've heard stories about hiding your cars in the garage for weeks, switching vehicles with your family members in another city for a little while, sitting in your cars while the repo man waits to snatch it up, and I've heard the stories from some who have actually chased after the repo man on foot. Needless to say, I wouldn't suggest doing this.
So what can the repo man do?
In Georgia, the repo man cannot breach the peace to retrieve that vehicle. I don't care if you're late on your payments and he's telling you he's got the law on his side, he cannot breach the peace to get the car without a writ of possession ordered by the court. This means that he cannot tamper with locks, threaten with physical or verbal violence, pretend to be a cop or hop a fence. He can, however, repossess the car if it is left outside in a way that doesn't require he breach the peace to retrieve it.
In order to avoid a situation getting worse and you're wondering if your car is about to be repossessed, please seek legal advice. Bankruptcy might be your only option at this point, and if not, at least know when to file bankruptcy. Wanting to know what to do if your car is about to be repossessed?
In the end, most car loans-gone-bad begin with debtors accepting the terms of the bad loan blindly because it satisfies an immediate need. The more you understand about these situations, the more you can avoid them.
Remember, like any time you borrow money, there is fine print and there are repercussions for not upholding your end of the bargain. It just so happens that agreeing to subprime loan terms will put you more at risk as a borrower, and if you accept those terms, you might find yourself face-to-face with the repo man. If you have any questions, whatsoever, please do not hesitate to call us!
Next week: Personal loans
