Illinois Vehicle Repossession and How to Avoid It
A difficult financial situation is hard to predict. The inability to pay bills can come suddenly. If you take out a loan or credit to buy a car, you will have to deal with the concept of “repossession.” Although it’s an unpleasant process, there is always a way out. To understand your options, you should be familiar with the repossession laws in Illinois and know how it works in practice.
What Is Vehicle Repossession?
Repossession is a pretty broad term. It denotes the process of returning a property to a lender, who has the right of ownership to it, in case a borrower has ceased to make payments under a contract for some reason. Vehicle repossession applies to all cars and trucks purchased under auto credit.
Under current Illinois law, lenders have the right to initiate a repossession process after the first missed payment. However, the nuances of your particular agreement with a creditor may fix the number of missed transactions, after which you will start to have problems. Also, remember that you have a so-called “grace” period, during which you can make payments without harming your credit score.
How Lenders Operate
The law establishes clear rights and obligations of the parties; however, in Illinois, creditors are not required to notify you in advance about seizing your vehicle. You should receive a letter after it happens, within three days. After that, you have three weeks to answer. Depending on the amount of your current debt, two scenarios are possible. If you paid more than 30%, you can make missed transactions and return the car. In case you paid less than 30%, you can buy the property (repay the loan in full) before the vehicle is sold.
Even though the law does not oblige the creditor company to notify you of the car seizure, they do not have the right to overstep the allowed limits:
- use physical force, threats, and other methods of violence;
- invade your private territory to take a car (for example, from a garage);
- deceive you and use tricks that make you leave property unattended;
- disturb neighbors and inform strangers about your situation.
Suppose you experience any of the above, file a claim against the company. However, you are prohibited from using similar measures, such as physically obstructing the seizure.
How to Avoid Repossession
In some cases, preventive measures can be the most effective. If you understand that you will not manage to make regular payments under the contract, tell your creditor about it. You can try to negotiate a postponement or revision of the money transfer plan. If you can’t reach an agreement, and the lender insists on seizing your car, you can file for bankruptcy. Depending on your situation, it could be either Chapter 7 or Chapter 13. Once you file for bankruptcy, the so-called “automatic stay” takes effect, temporarily stopping all other proceedings.
Know Your Rights and Options
A car is an essential tool in the lives of many people. Without it, it could be challenging to perform daily tasks and even work. If you run the risk of being left without a car, you should contact experts in this field and get professional advice. After analyzing your debt, they will offer you the best way out of this situation.