Even when a New York resident purchases a car on credit, it is easy for that buyer to feel as though the vehicle in his possession is completely hers. She may make modifications to it and use it for purposes ranging from business to pleasure. However, if she fails to make the payments she agreed to make when securing his financial loan for the vehicle, she may find that car being repossessed and taken out of her life.
According to the Federal Trade Commission, parties that extend loans to others for the purposes of allowing individuals to procure vehicles have rights even after the vehicles subject to the loans are taken into the possession of the loan-receiving parties. Practically every car loan that it extended is based on a contract, and in that contract a purchasing party agrees to certain terms in exchange for receiving money with which to buy a car.
Car buyers may agree to make full and timely payments to their creditors on their car loans. They may agree to pay interest or other fees based on the sum or duration of their loans. They may agree to certain penalties, including repossession, if they miss payments toward their loans or otherwise default on the loans they had secured.
Though to some extent laws protect consumers from abuses by creditors in these situations, it is important for individuals to remember that creditors have rights during the period of time when their outstanding loans are unpaid. Once a loan is satisfied, many of a creditor’s rights disappear; it is during the time when they are still owed money that they may repossess vehicles.
Buying a car on credit is not unusual. It can, however, become a difficult legal problem for an individual who has missed payments toward the balance of his car loan. To learn more about repossession and ways to deal with potential penalties assessed by creditors, readers may consider speaking to bankruptcy attorneys about their specific legal needs.