Debtors Unite: Help with Car Payments
Help with Car Payments, Loans and Refinance


Repossession of your car can be one of the most embarrassing and costly events in your life. It is a major consequence of defaulting on your car loan.

Repossession agents frequently seize your car at your home or workplace. This means that your private financial troubles become the gossip of your neighbors and coworkers. You might even be passed over for a promotion because of it.

A lender has the right to repossess your vehicle if you fail to adhere to the loan contract. Even so, they do sometimes exercise leniency if you communicate your troubles to them in an attempt to negotiate a work around.

Consequences of Repossession

You might be stranded if your car is repossessed. Can you catch a ride with a co-worker? Can you take the bus? Do you have to pick your kids up from daycare? Do you have an alternative method for getting to work?

Let's assume you owe $20,000 on your loan. When the lender repossesses the car, they tack on legal fees, repossession fees and storage fees. The loan balance may swell to $22,000 or more.

Then they will arrange to sell the car to recoup their losses. This is frequently done at auction, in which dealers bid on the car at below-market rates. Assuming that you were already upside down on the loan, the car that you owed 20 grand on might only be worth $15,000 due to high mileage and other wear and tear. That car may only sell for $12,000 at auction.

When the smoke clears, you could still owe $10,000 on your loan and have no car to show for it. You might still have to come up with more money for a replacement car. If you require financing, your new loan could cost you much more due to the recent repossession.

If you turn over keys to the lender, you might be able to avoid some of the embarrassment and costs associated with repossession. Still, your credit record will be damaged since there is no distinction between a voluntary repossession and an involuntary seizure.

You might find that you have other resources that you can tap into to get your car back. You might be able to sell some property to raise quick cash. Maybe your family will provide you with a loan. By paying off the entire loan balance before the car sells, you can normally get it back. This is an expensive transaction, so it is best to avoid repossession in the first place.

If you still owe a balance and have no car anymore, the debt is essentially unsecured. To ease the impact, you might consider consolidating your debts to see if you can lower your monthly payments and avoid legal action that may result from nonpayment.

Our Promise
Unlike the advertisements that you may see claiming that they can modify your car loan, we tell you the truth. We do not modify your car loan, and neither do they. The difference is that we don't charge you and instead give you the tools you need to keep your car.
Car Loan Advocate
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Debtors Unite, Inc.
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Suite 200
Raleigh, NC 27606