Missed payments on your car?

Here are some non bankruptcy events that may take place if you miss payments on your car:

1. Repossession of car. If you do not make payments when due, you are in default under your financing contract. Your lender can take possession of the vehicle as long as she does not breach the peace.
   
2. Right to sell the car. The lender may sell the car if you are in default. The amount on the loan is almost always higher than the sales proceeds so you will be liable for the difference, the excess of the sales proceeds over the loan, (the "deficiency"). But there is a good chance that the dealer will not take you to court to collect this deficiency.
   
3. You can make a deal with the car dealer. Here are some alternatives:
   • Reaffirm your original agreement by agreeing to make up missed payments and then staying current.
   • Buy the car for the balance due.
   • Buy the car for its estimated value.
   • Just abandon the car-let the dealer have it.
   • Make a new deal which: extends the term of the loan; lowers the interest rate; allows you to skip a few payments and make them up later.