Repossession Of Vehicle By Creditor

My Car is Being Repossessed By My Creditor

When you borrow money, the lender often requires you to put up collateral as a security measure. In the case of a car loan, the vehicle itself typically serves as this collateral. But what happens if you’re unable to meet your loan obligations? This is where repossession comes into play – a perilous process that could potentially lead to the loss of your vehicle.

What Is Repossession?

Repossession occurs when a creditor takes back the property that was bought or used as collateral for a loan. This typically happens when a borrower defaults on their loan payments.

The Repossession Process

The repossession process typically follows a series of steps:


Loan default.
This is the initial step where the borrower fails to meet their loan obligations.

Notice of default.
The lender sends a notice to the borrower informing them of their default.

Right to cure.
The borrower is given a chance to pay their default and reinstate the loan.

If the borrower still fails to pay, the lender has the right to repossess the vehicle.

Sale of vehicle.
The lender sells the repossessed vehicle to recover the amount owed.

Impact Of Repossession On The Borrower

Repossession is not merely a process of losing one’s vehicle; it can also have a significant impact on the borrower’s credit rating. It can make it difficult for the borrower to secure loans in the future and can even lead to bankruptcy in severe cases.

Handling Repossession

Here are some strategies to handle repossession:

Pay the Default

The simplest way to avoid repossession is to pay the default amount. This can help you reinstate your loan and get back your vehicle.

Renegotiate the Loan

If you’re unable to pay the default, you can try renegotiating the terms of your loan with your lender. They might be willing to lower your monthly payments or extend your loan term.

Voluntary Surrender

If you’re unable to pay or renegotiate your loan, you can choose to voluntarily surrender your vehicle to the lender. While this still impacts your credit, it’s less severe than forced repossession.

Legal Protection Against Repossession

In some jurisdictions, laws protect consumers from aggressive repossession practices. For instance, in British Columbia, under section 67 of the BC Personal Property Security Act, a secured creditor may not be able to demand additional payment from you if they repossess your vehicle and the value of the vehicle is less than what you owe.


Understanding the process of repossession and your rights as a borrower can help you navigate this challenging situation. Always consult with a legal professional if you’re facing repossession to ensure that your rights are protected.

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