Can’t afford your car payments? Everything you need to know about Voluntary Repossession

Life happens and sometimes it happens at the worst moment and you find yourself struggling for a solution. It might have been a life event or a change in your income but whatever the case you’re not able to afford your car payments and now you don’t know what to do! There is no easy fix, the best solution would obviously be to keep your car and continue the payments but that isn’t always possible. Voluntarily surrendering your vehicle may be slightly better than having it repossessed but unfortunately, both are very negative and will have a serious impact on your credit scores.

Surrendering your vehicle and repossession are fundamentally the same thing in financial terms. You are unable to make the loan payments, so the lender is taking the vehicle. It will be sold to recoup as much of the debt you owe as possible.

The difference between the two is day and night literally. When you surrender the vehicle, you return it to the lender on much more positive emotional terms, usually during business hours. When a lender repossess the vehicle, they may send someone in the middle of the night to take it while you sleep, which can be much more distressing for everyone involved.

The less tangible issue is that when you voluntarily return the vehicle, you are taking some responsibility for the debt you owe. Be sure you completely understand the terms when you make the voluntary surrender. If there is a balance remaining and you don’t pay it, it could be turned over to a collection agency, which will add a collection account to your credit history.

When you voluntarily surrender the vehicle, your credit report will indicate that fact in the status of the account by listing it as a voluntary surrender and any remaining balance will continue to be reported. If the bank has to come take the vehicle, they will report the account as a repossession, and that will be reflected on your credit report, as well.

We can definitely help each and EVERY situation, please give us a call at 844-FIX-URCR or to schedule your FREE consultation!

*Individual results may vary. Please call for more details and to discuss your own individual situation.

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