Behind on Car Payments? Understanding Your Rights Before Repossession Happens
Falling behind on car payments can feel like a race against time. As the late notices pile up, the fear of walking out to find your vehicle gone becomes very real. But while the situation is serious, it’s not hopeless. If you’ve missed payments or are struggling to keep up, it’s important to know that California law gives you rights—and there may still be time to take action before repossession occurs.
The Los Angeles repossession lawyers at Wadhwani & Shanfeld, have helped thousands of clients throughout Los Angeles and across California deal with overwhelming debt, including the threat of vehicle repossession. Whether you need help negotiating with lenders or you’re considering bankruptcy to stop aggressive collections, knowing your legal options is the first step toward regaining control.
The Repossession Process in California
In California, auto loans are typically “secured debts,” meaning your vehicle serves as collateral for the loan. If you default—usually defined in the contract as missing even one payment—the lender technically has the legal right to repossess the car without going to court. They don’t need your permission, and they don’t have to give you notice ahead of time.
However, that doesn’t mean repossession is immediate or inevitable.
Most lenders do not rush to repossess after a single missed payment. Repossession is expensive and time-consuming for them too. It often doesn’t happen until the borrower is at least 60 to 90 days past due. This gap between missed payments and repossession is where opportunity lies. It’s a window of time when you can act to protect your vehicle.
Warning Signs That Repossession Could Be Coming
While lenders aren’t required to notify you before repossessing your car, they will usually send late payment notices and possibly collection calls or letters. These are not just routine reminders—they are early signals that the account is moving toward repossession.
You may also notice the loan has been referred to a collection agency or that the lender is no longer accepting partial payments. This shift in behavior usually means your vehicle is at risk. Once the lender sends your account to a repossession agent, the vehicle could be taken at any time, often without warning.
What Are Your Rights Before Repossession?
Even though repossession can occur without a court order, California law places important limits on how and when it can happen. A repossession agent may not use force or breach the peace when taking your car. This means they can’t enter a locked garage, threaten you, or physically remove you from the vehicle. If they do, the repossession may be considered illegal, and you may have grounds to challenge it in court.
Additionally, you have a right to redeem your vehicle at any time before the sale by paying off the full loan balance, including fees. After the car is taken, you are entitled to receive notice of the repossession and a statement of your rights to get the car back or attend the sale.
But the best time to act is before repossession occurs. That’s when you still have the most options—and leverage.
Your Options to Prevent Repossession
If you’re behind on payments but haven’t yet been repossessed, several strategies could help you avoid losing your vehicle.
Communicate with your lender: Many lenders offer hardship programs, especially if your financial troubles are temporary. A deferment or modified payment plan might be possible, but you must act early. Once your loan is transferred to a recovery agent, options become limited.
Reinstate the loan: In California, you have the right to bring the loan current before repossession by paying the overdue amounts plus any late fees. This is different from paying off the entire loan—it’s simply catching up. However, some lenders limit how often you can reinstate, so this may not always be available.
Sell or refinance the vehicle: If your car is worth more than you owe or you can find a better loan, refinancing or selling it yourself may be preferable to letting it go to auction, where vehicles often sell for less than their value.
File for bankruptcy: Filing for bankruptcy creates an automatic stay, a powerful legal shield that immediately halts most collection activities, including repossession. This can provide critical breathing room to either restructure your debts or discharge them entirely, depending on the type of bankruptcy you file.
In Chapter 13 bankruptcy, for example, you can propose a repayment plan that allows you to keep your vehicle while catching up on missed payments over time. This is particularly useful for individuals who need their car for work or family responsibilities but have fallen behind due to temporary hardship.
Even Chapter 7 bankruptcy, which focuses on debt elimination rather than repayment, can delay repossession and wipe out unsecured debts that may be affecting your overall financial situation. In some cases, if the vehicle is not worth much and you don’t want to keep it, Chapter 7 allows you to surrender the car and discharge the remaining loan balance—giving you a fresh start without lingering debt.
Don’t Wait Until the Tow Truck Arrives
Many people delay seeking help because they feel embarrassed, overwhelmed, or hopeful that things will improve. But when it comes to vehicle repossession, waiting too long can mean fewer options and greater consequences.
Losing your car can affect every aspect of your life—your ability to work, care for your family, or attend medical appointments. Acting early not only increases your chances of keeping your vehicle, but it can also put you on the path to broader financial recovery.
Contact Wadhwani & Shanfeld
If you’re behind on car payments and worried about repossession, the time to act is now. At Wadhwani & Shanfeld, we understand how hard it is to face these kinds of financial struggles—and we’re here to help. Whether through debt negotiation, loan reinstatement, or bankruptcy, we’ll work with you to protect your rights and explore every option to keep your vehicle and restore your peace of mind. Contact us today for a free consultation and take the first step toward financial stability.
Source:
equifax.com/personal/education/personal-finance/articles/-/learn/what-is-reposession
