Auto finance companies can repossess a car for any default if you’re one day late. We have seen cars repossessed with only one month in default. Repossession after only one month is rare but they have the legal right to do so.
WHAT IS THE REPOSSESSION PROCESS IN ILLINOIS?
Once an auto loan is in default, the finance company can use self-help. That means they can repossess the car at any time and they don’t need a court order. While they are not permitted to take a car off a private property, that provision is frequently violated.
CAN I GET MY CAR BACK IF I GET CURRENT ON MY PAYMENTS?
Not necessarily. If you have paid 30% of the total amount due, the law allows you to get your car back if you come up with the back payments plus other costs. You are only given 15 days for this provision. This provision can only be used once so it doesn’t apply on a 2nd repo. Of course if you pay the full balance and additional costs, you can get the car back anytime.
WHAT DOES A REPOSSESSION DO TO SOMEONE’S CREDIT HISTORY?
A repossession will lower your credit score. It’s really the same if you voluntarily return the car. You don’t get points for doing on a voluntary basis. Plus you still owe the rest of the loan so your credit continues to take a hit each month you owe.
CAN A CHAPTER 7 BANKRUPTCY OR A CHAPTER 13 BANKRUPTCY STOP A REPOSSESSION?
Yes. If you’re behind on your car payments in a chapter 7, it’ll stop repossession for a short time. Generally the finance company will file a motion with the bankruptcy court and be given permission to repossess your car. In a chapter 13, on the other hand, you have the opportunity to pay the full balance over a longer period up to 60 months.
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