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I Am Behind on My Car Payments

Question: I am behind on my car payments and feel my car is about to be repossessed. What should I do?

Answer:

1 Call the creditor, explain the reasons for your financial issues, and see if something can be worked out. Make sure it is documented.

2. If your car is repossessed, and you have paid over 30% on at least a consumer-purpose contract, you have the right to reinstate the contract, once, by tendering the missed payments and repossession expenses.

3. Do not keep the purchase contract and other documents in the car

4. In the case of a sale, you are entitled to notice of the intended disposition of the car within 5 days after the repossession. If it is a consumer purchase, you also must be furnished with an “affidavit of defense” by which to object to the issuance of a repossession title and notice of your 30% right, if applicable.

5. Advance notice of repossession is not required in IL for a sale, but is for a lease.

6. If you cannot afford the car, you are better off selling it yourself than allowing it to be repossessed or turning it over to the creditor. Creditors generally sell repossessed property at auctions at a low price. You will get more selling it yourself. This includes trading it in for a less expensive vehicle. The creditor must agree to release its security in exchange for the sale proceeds if they are less than the amount outstanding, but if it is a genuine sale for what the car is worth, it will have serious problems collecting a deficiency if it refuses.

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