Illinois Vehicle Repossession

When most of us purchase a new vehicle, we rely on a loan from a financial institution. But, many consumers fail to realize how easy it can be to lose their car to a creditor. Knowing how to avoid vehicle repossession, and what to do if your car is repossessed, can be essential in ensuring you retain access to the transportation you depend on.

How Repossession Works

In Illinois, your vehicle may be seized by your lending institution as soon as you default on your loan or lease. What may constitute a default can vary based on your individual contract, but missing a payment or making a late payment is by far the most common example. A car can be repossessed even after just one missed payment.

Be careful about the promises made by your bank or other lender. Any assurances that your vehicle will not be repossessed after a single late payment should be made in a written contract. If your vehicle is repossessed, carefully document the manner of repossession. Although a creditor can enter your property to retake a vehicle, if a "breach of the peace" is committed in seizing the car (such as using force, threats, or entering a secured building without permission), you may be entitled to compensation for any resulting harm.

Avoiding Seizure and Getting Your Car Back

Of course, the surest way to prevent your vehicle from getting repossessed is to make all payments on time and maintaining the required insurance. But, if something comes up that prevents you from making a payment, you should contact your lender. If they are given adequate notice, many creditors will offer you an extension or the opportunity to make a partial payment, which can allow you to keep your vehicle. Insurance must be maintained throughout this process.

If your car does get repossessed, in Illinois you can get it back if you pay all late payments, any penalties for tardiness, and the expenses incurred in repossession within 21 days. However, this option is only available if you have already repaid at least 30 percent of your loan. If you have not paid off a third or more of your car, you may be required to pay the total outstanding amount of the loan to get it back.

A Chapter 13 bankruptcy may also help you to prevent repossession or get your vehicle back. If repossession has been threatened but not yet accomplished, a Chapter 13 bankruptcy will stop the repossession upon filing. If the repossession has already taken place, a Chapter 13 bankruptcy will almost always allow for the vehicle to be recovered, so long as it is filed within the 21 day period. If it is past the 21 days and the vehicle has been sold, a Chapter 7 may allow for the discharge of your remaining liability.

If you have questions about your rights to your vehicle, contact an experienced bankruptcy attorney to obtain advice and discuss the best option for your situation.