During COVID, many consumers experienced wrongful repossession of their cars, trucks, motorcycles, RVs or boats — not just by big banks, such as Wells Fargo, Chase, Capital One or Bank of America, but also by credit unions and subprime lenders. While some lenders claimed to have paused repos, the rate of repossessions during the pandemic still seems to be high. Indeed, as the Fall and Winter of 2021, a lot of COVID pandemic protections states implemented to help consumers reeling with COVID have expired.
After falling behind, many borrowers requested to have payments lowered or deferred by their lender. Whether suffering from hardships related to unemployment, child care expenses, or missed work due to the pandemic, vehicles were still repossessed.
When do lenders decide to repossess vehicles?
Lenders don’t care why borrowers are late. They want to be paid. Most decisions to repossess are made automatically by lenders’ computer systems, and sometimes as quickly as missing only one payment. When the system notices a missed payment, repo orders are sent electronically to the repo agent who is assigned to take the car. These same computers will simultaneously send negative late payment and repo notations to the credit bureaus.
Fallen Behind? Three Steps to consider.
1. Contact your lender
Call the bank, credit union or financial institution and discuss whether payments can be postponed. Possibly, the lender may be willing to negotiate the due date or amount. Be sure to get any changes to payment terms in writing – whether it’s a big bank like Bank of America or Capital One, a credit union or a sub-prime lender, you must receive confirmation of any changes to the loan from the lender.
2. Consider refinancing the loan
Contact other credible lenders to see whether your loan can be refinanced at terms that you can meet.
3. Seek legal guidance from Flitter Milz, P.C.
The attorneys at Flitter Milz are experienced in representing consumers against banks, credit unions and financial institutions, as individuals and in class action lawsuits, for violation of their rights after repossession.
MOST IMPORTANT — Don’t ignore the debt. Seek a solution.
Borrowers have rights after repossession
Wrongful Repossession: Was my vehicle repossessed in error?
Breach of the Peace: Did the repo agent use violence or damage my property?
Police Involvement: Did the police assist in the repossession?
Improper Notices: Did the lender provide proper notices after the repossession?
Credit Reporting: Are there errors on my credit report related to repossession?
Repossessions, Credit Reporting & Credit Scores
Vehicle repossessions carry negative weight on credit reports. Consumers must check their reports for accuracy and determine whether the lender has listed the payment history, loan status or balance owed in error. To obtain a current copy of your credit report from Transunion, Experian or Equifax consumers may write to the credit bureau or visit: annualcreditreport.com.
When errors appear on credit reports, the consumer must send a written dispute to the bureau. The dispute must be accompanied by supporting documents that illustrate the error. The credit bureaus have 30 days to respond to the written dispute.
Auto loans that have fallen into default, and ultimately the vehicle is repossessed, a negative listing will appear on the borrower’s credit report. The lender’s tradeline may be listed on the reports for 7 1/2 years from the date the last payment was made. This listing will factor in to a lowered credit score and make it difficult for the borrower to secure favorable terms on loans going forward.
Seek Legal Help After Repossession
Flitter Milz is a nationally recognized consumer protection law firm that pursues matters against banks, credit unions and financial institutions for the wrongful repossession of cars, trucks, motorcycles, RVs and boats. Contact Us for a no cost legal evaluation to determine whether your consumer rights have been violated.
Pictured: Cary Flitter (center),
Andy Milz (left), Jody López-Jacobs (right).