Voluntary Vehicle Repossession
Car repossession is a term that refers to the fact that the creditor decides to take back the vehicle for the buying of which he has lent money. This occurs only when the loan gets into default this meaning that the borrower, also called the default owner, can no longer give money back to the bank or the creditor, and has already missed one monthly payment at least. This procedure can be done without the default owner’s agreement or with his or her agreement, the latter type of repossession being called voluntary vehicle repossession.
In case there is no voluntary vehicle repossession, there is still a procedure that has to be followed by the creditor. First he has the obligation to notify the default owner by means of mailing or calling about not respecting the settled dates for payment. He is to give the default owner a grace period and after that more warning before the non voluntary vehicle repossession. Since it is non voluntary, the default owner my end up in panic thinking that his car has been stolen, yet the car may be in safe hands except that it is in those of the creditor. So the repossession in this case need not be announced beforehand. The repossession companies hire very efficient individuals paid for tracking down the vehicle, for collecting and eventually storing it safely. These guys may show up at your door even in the middle of the night asking for the car keys and the vehicle in the name of the creditor, or if you refuse to give the keys they will simply collect the car and charge you extra for a new set of keys the creditor will have to make.
On the other hand, repossession may go smoother if it is voluntary vehicle repossession. This means that the default owner is aware of not having the money to keep paying back to the creditor and, as a result, he or she decide to and do give back the car by themselves. This is quite a deal for the default owner as in this case he or she will not have to pay any extra money under the form of charges or fees for repossession, storage and making of a new set of keys for the car. From this perspective, the friendly terms of voluntary vehicle repossession are rather less expensive than those non friendly and disagreeing as it with non voluntary vehicle repossession.
One last important note is that voluntary vehicle repossession still means repossession and the creditor will still report repossession on your loan. From the paperwork point of view and the status of the borrower there is no difference. However there is one in terms of debt, which in the case of voluntary vehicle repossession, is not increased by extra charges.