Getting your car repossessed is a big deal. It can make it impossible for you to get to a job where you earn the income that not only makes the payments on your car, but puts food on the table and clothes your family. It can be a stressful thing when your car is involuntarily repossessed.
But what about voluntary repossession? Is it possible that you can get out of the debt you owe on your car quickly if you just give up your car yourself? Will it hurt you if you do something like this, or is it better to do it yourself than to just let the lender decide when they want to take your car?
Actually, it really makes no difference who issues repossession. Whether it is voluntary or not, it is going to have the same effects on you either way. It is important to know a little bit about repossession before you make any quick decisions about getting your car repossessed at your request.
It really does not matter who repossesses your car. You are still going to face the same consequences if you voluntarily have your car repossessed as you would if it was done without your consent. Getting your car repossessed yourself is usually not the best decision you could make when trying to get rid of the balance you owe on the loan you took out to pay for your car.
One of the major downfalls of getting your car
repossessed is that your credit score goes down and that it shows up on your credit report. This will not change if you have your car voluntarily repossessed. This negative information will show up on your credit report for at least seven years, whether or not the car was repossessed voluntarily.
You have no say in what happens to your car once it is repossessed. Your lenders will usually sell the car, and try to get the money out of it that you owe. Often, it will sell for less than the balance you owe, therefore still leaving you owing money to the lender for a car you do not even have anymore. This balance that you will owe after the car is sold is called a deficiency balance. Just because the car is no longer in your possession, you are still obligated to pay the amount of money that they could not get from the sale.
However, if the amount they sell the car from is more than the amount you owe, they are obligated to give it to you.
There are rights you have that say that any money received after the car is repossessed and sold, and the balance is paid off, goes to you. This happens, however, whether the car is repossessed voluntarily or involuntarily.
Voluntary repossession should not be one of your first options. You should seek help elsewhere before you resort to this. Many lenders will negotiate with you so that you can pay off your loan in a way that's easier for you to live up to, if you just ask about it and tell them your situation.
