Millions of Americans are unable to pay their car loans during the coronavirus pandemic. The financial insecurity caused by shutdowns related to COVID-19 has resulted in many Americans losing their jobs or having their hours at work cut by their employers. If you are one of the many Americans who have had to skip a car payment, you may be concerned about your car being repossessed. Currently, over 7% of all U.S. car loans are in some type of deferment program.
The Dangerous of Missing Car Payments
Many Americans who never missed a car payment are now concerned about their vehicles being repossessed. Due to no fault of their own, their hours have been cut, or they have lost their jobs, and they cannot make their car payments. Some have had to sacrifice making a car payment to buy groceries or pay their mortgage. Failure to make a car payment can lead to credit score damage or your vehicle’s bank repossession.
The exact process for repossession depends on the details in your car loan contract. Most car repossessions happen around two to three months of missing payments. If you have never missed a car payment before, your lender may be more forgiving. Once again, the sooner you address the issue with your lender, the greater the likelihood of them working with you to find a solution.
Many Lenders Have Financial Hardship Programs
If you are concerned about your car being repossessed, there is hope. Many lenders have ramped up their efforts to provide financial hardship programs. They may be more likely to be forgiving of your missed payment or payments if you ask for help or participate in their financial hardship programs. The worst thing you can do is ignore the problem and wait for them to repossess your vehicle. You will need to ask for help from your lender. The first step is to determine what types of help your lender has available.
Auto deferment payments typically help individuals whose payments are at least 30 days overdue. Most lenders will repossess your vehicle after you have missed three or more payments in a row. When you receive a forbearance or deferment, you can skip between one to three monthly car payments without paying any penalties or late fees. When the deferment. Once the deferment period is over, your lender may extend your loan or increase your monthly payments. Keep in mind that interest will continue to accrue during the deferment payment.
If you purchase your vehicle through a car dealership, they may be offering a coronavirus relief program. Many car dealers are also offering coronavirus relief programs for those who are leasing vehicles, as well. Additionally, many large and medium-sized banks have announced that they are offering coronavirus relief programs. Many states have issued protections through executive orders and legislative action to protect Americans who are facing repossession of their vehicles.
Contact an Attorney Today
If you are concerned about your vehicle being repossessed or you would like to explore your options for filing for bankruptcy, we can help. Contact our Los Angeles Bankruptcy Attorneys today to schedule your initial consultation.