In modern day life a vehicle comes top of the list on the different amenities that are a necessity of life. Though public transportation is an option, the convenience and versatility that comes with being able to drive wherever you want, when you wish is incomparable. This has resulted in many individuals opting to purchase their own cars. As more sophisticated and pricey models come onto the market, it has become standard practice to purchase a vehicle on finance. With this phenomenon, there has also been an increase in people who default on their payments, particularly in times of economic crisis. It may be of interest to take a closer look at what exactly happens when an individual falls back on their installments.
In instances where one’s circumstances change, a common one being the loss of employment, one is bound to miss their first payment at some point. When this happens, your lender is bound to contact you to ascertain what the situation is. Usually the idea is to ascertain whether you will be in a position to pay the amount in the future or otherwise. Depending on how flexible the loan arrangement is, it may also be possible to adjust the repayment terms at this juncture.
The real trouble starts after you continue to default on your payment, usually past a stipulated period, often 30 days. The lending institution’s first port of call may be the major credit bureaus. This will be coupled with consistent communication from the lender to try and appeal to the debtor to pay up. It is also typical for fines or penalties to accrue on the outstanding amount.
If these efforts turn out to be fruitless for the lender, they may choose to declare your account as a default. This means that they have little to no hope or expectation of receiving any more payments from you going forward. The process involves selling off the debt to a debt collecting agency at a fraction of the cost. It is these agencies that then have the job of tracking your down and repossessing the article or asset in question.
Even in instances where you face repossession there are still some options that may be worth pursuing. Such paths as debt refinancing and debt reconciliation can come in handy in extreme cases.