Vehicle repossession occurs when there is a default loan present. The person who makes the loan has to sign a contract which specifies what the creditor is allowed to do in case the money is not returned by the debtor as stipulated in the contract. Every time, the creditor lets the debtor know that the there is an overdue payment date and informs the debtor about what the next steps will be in case the amount of money to be paid monthly is not given to the creditor.
Next should follow a grace period during which time more warnings are given to the debtor either via mail or phone. Finally, after the grace period is over, the creditor may be entitled to proceeding with vehicle repossession which means that the creditor actually takes the car from the default owner and writes an affidavit of repossession in front of a notary public.
Vehicle repossession is in itself carried out not by the creditor, but by a repossession company which hires and trains its people to track and recuperate vehicles or other goods that need to be repossessed. These services are paid by the creditor, but the actual money come from the default owner’s pocket, as his debt has actually increased with the extra charges of repossession, storage and other fees. Even though the default owner disagrees with the repossession, his car can still be taken by creditor and this may happen even in the middle of the night.
Vehicle repossession occurs because many creditors make the contract specifying that until the last dime is paid back to them, they are the real owners of the car. Therefore, it is of highest importance to read each contract of loaning carefully before it is singed. And the small font lines might be the ones to specify under what conditions repossession or extra fees are to occur.
All in all, vehicle repossession may represent quite a loss for the default owner. Unless he willingly returns the car to the creditor, which rarely happens in reality, he has to pay more back than he actually owns in papers because of those extra fees and charges. Sometimes the repossession may be attempted to be stopped taking the case to a court of law. If repossession has been done in a forced manner and there has been destruction of property – what they call a breach of peace, then the creditor will not be allowed to ask for or get deficiency judgment, that the difference between what the debtor actually owes and what the creditor gets for the car after selling it.