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Get angry at your overdue debt, not your lender

Don't be mad at the carmaker who asks for the payment you agreed to make

By

To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets.
Ask Sally a question, or read her previous answers in the To Her Credit archive
Question for the CreditCards.com expert

Dear To Her Credit,
I was recently evicted from my apartment and am over two months late on my car payment. I will be three months late on the 24th of the month.

My question is, if I make one payment on the 24th (to make it still only two months behind), can they still repossess my car? I hate Nissan and even hate that I got this car from them! -- Erin

Answer for the CreditCards.com expert

Dear Erin,
Is there any chance you may be misdirecting your anger about your financial crisis at Nissan? Unless your car is a real lemon, they seem to be just the hapless finance company that wants you to pay what you said you would. It's important to sort out what's bothering you so you can make the best decisions based on facts, not emotion.

Unfortunately, one fact is that making a single payment when you are almost three months behind may not save your car. Car owners don't have the same legal protections that tenants do. After you missed a rent payment, your landlord went through a lengthy process before he could evict you. Finance companies with car loans don't play by those rules. Although the amount of time you have, depending on the laws of your state and the terms of your financing contract, lenders can generally repossess your car any time you miss a payment.

Having already missed two payments, you're running out of time. You could wake up any morning and find your car gone. Repo companies often work at night to avoid confrontations; police officers say they often respond to calls about "stolen" cars that have actually been repossessed while their owners were sleeping. You must take action immediately to avoid losing your car.

Here's what to do:

1. Decide if you want to keep your car. If you really hate your Nissan or decide you can't afford it, sell it and pay off your loan. With luck, you'll have enough left over to buy an older car. Or, depending on where you live, you might be able to get along without a car until your finances improve by taking public transportation or catching rides with friends.

2. If you want to keep your car, call the finance company immediately. Ask for a temporary reprieve from full payments or make some other arrangements. If you have reduced income; for example, if you're on unemployment benefits, they may work out a longer payment period with lower payments. Or they may tack the missed payments on to the end of your loan. Get any change to your contract in writing.

3. Look for a loan with a lower interest rate. If you financed your car through the dealership, you may not have gotten the best deal in town. Try refinancing through your bank or credit union. I don't recommend transferring the balance to a credit card -- there's too great a chance of the interest rate going up.

While you're working something out, make it harder for the repo man to find and take your car. You can't stop them from repossessing your car forever -- eventually the finance company will use legal means to make you give it up. But for the short time you're working out financing or trying to sell your car, you can certainly slow them down. In most states, companies can't break into a garage or take your car from the driveway if you or someone else tries to stop them. Keep your car in a locked garage or at a friend's house. Don't try just parking your car two or three blocks away on the street -- they're wise to that.

The best way to get out of a financial mess is to stop blaming Nissan or other creditors and look for long-term solutions -- a better job, a lower cost of living or other positive changes. As you look for solutions, remember many people have been in similar situations and have gotten through it, and you will, too. Take care.

See related: Evaluate financing when deciding on a new car vs. used, In default on car loan: What to do?, Behind on car lease payments: What to do?, Unpaid car lease fees can ruin your credit

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Published: June 11, 2010


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Updated: 12-05-2016


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