Voluntary Car Repossession Laws

If you have a car loan and find that due to severe financial reverses you are unable to make your car payments, you may be interested to learn about voluntary car repossession laws. Laws concerning commercial loans with collateral such as a car are state laws. They are part of the UCC (Universal Commercial Code) which was developed by the American Law Institute and has been adopted in whole or in part by each of the 50 states.

These state laws cover the process of involuntary car repossession, and since the end result is the same to the consumer there are no voluntary car repossession laws. You need to do is read the terms and conditions of your car loan. That document will detail the remedies or actions that your lender can take if you are late or miss your payments. For the most part, you can do yourself a world of good if you contact your lender as soon as you realize you are going to have a problem making your payments.

Companies that write car loans really don't want to own your car. If your situation might be temporary, talk to them about a temporary modification and how you can catch up on your payments.

If you really can't afford to make your car payments and you know it is going to be repossessed, you can save yourself some hassle and potential embarrassment if you voluntarily turn your car back in to the lender. As an example, if you plan to turn the car in you can make sure all of your personal property is removed from the car and don't risk losing that too.

Whether your car is voluntarily or involuntarily repossessed, under the law you are still liable for the value of the loan. Turning the car in only saves you potential additional fees for the actual repossession. When the lender sells your car at auction, you are credited for the amount they got for the car but remain responsible for the difference between that amount and what you owe.

The lesson here is that before getting involved in a voluntary repossession, contact your lender and try to sell the car yourself chances are you will get more for it than they will settle for and you'll end up owing maybe as much as thousands less. Not sure what to do? Call a licensed attorney for advice about your particular situation.

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