Question: I suffer from bad debt management. I am behind on my car payments and it’s about to get repossessed - what can I do?
Answer: The good news is that you have identified the problem and you are willing to own up to it. Car repossession is usually the result of folks buying more vehicle than they can afford.
Sometimes a repossession may take place as a result of a catastrophic event in your life such as huge medical expenses or a law suit that taps your financial reserves.
"All adverse and depressing influences can be overcome,
not by fighting, by by rising above them.”
- Charles C. Colton |
The other common reason for repossession is because people simply fail to save for a rainy day. When something terrible and unexpected happens, it is almost always easier to get through it if you have your emergency fund available to fill the gap until you can maneuver through the financial storm.
Whatever your particular case may be, once repossession has entered the picture, there is very little you can do to stop it – short of paying off the debt entirely.
Keep in mind, repossession is not an abrupt occurrence – this did not just happen overnight. Both credit card laws and debt collection laws are pretty clear at this stage of the game.
Though lenders do indeed want their money paid back in a timely manner, they cannot simply take possession of the vehicle without giving you proper warning and an opportunity to remedy the situation.
Bad debt management amounts to neglecting matters such as these over a long period of time.
Despite the many late notices and repeated calls from debt collectors, too often the consumer is so embarrassed and/or scared, they simply do nothing – which is the worst thing they can do.
Many lenders are willing to work with people on a debt settlement program in order to create a repayment plan for the loan and minimize their chances of taking a loss. The lender does not want to take your car! It costs them money when they have to repossess assets. However, continuous bad debt management on your part, gives the lender no alternative.
Lending companies are much less interested in obtaining your car than they are with recovering their principle and continuing to earn interest on the money you borrowed.
It is time to shed bad debt management habits and become proactive, as those poor money habits are what led you to this negative position in the first place.
Depending upon how long it has been since the debt collectors began contacting you, you may only earn yourself a few extra days. However, if it has been too long and repossession is imminent, take the initiative and take the car in yourself.
Taking this sort of action will leave you feeling better overall because you have taken ownership of the issue and taken responsibility for the default. It will be much better than waking up one morning and discovering your car has been towed away in the middle of the night.
Taking the car in will also allow you the opportunity to speak with the lender and find out what future options may be available to you to recover the car is that is your desire. However, doing nothing – producing nothing.
Next, it's time to get some personal debt help. Take control of your debt and your finances. With some focus and hard work you won’t have to lose another car ever again.
Hold your head up high, learn from your mistakes and go where others in your position must go – BACK TO WORK. Start saving some money and work toward paying down your debt.
Speaking of work, start now by completing this free household budgeting tool.
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"Fresh activity is the only means of overcoming adversity.”
- Johann Wolfgang Von Goethe |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
