Car Repossession & Bankruptcy


Car repossession is a very serious matter. Not only do you lose your vehicle, but the damage to your credit report is also tremendous.

How Long Does A Repo Stay On Your Credit Report?

A repossession stays on your credit report for 7 years. The countdown begins from the date of the first missed payment which triggered the repossession. A repo will also lower your credit score by 100 points or more.

How Does Repossession Work?

When purchasing a car, the agreement allows the lender to repossess the vehicle due to “security interest.” The lender holds a stake in the vehicle until it's paid off. There are no limits to how the lender can act, provided that they are not committing crimes to repossess it.

In Oklahoma, a majority of repossessions involve cars or trucks, however, any vehicle with a loan may be repossessed such as a motorcycle, ATV, boat, etc.

What a Lender Can or Can't Do

Under Oklahoma repo law, the repossession agent may not enter your home to repossess your property unless they are invited in. They may not use violence to repossess your property. Repo agents are also not allowed to trick you into bringing your vehicle to a shop for repair and then repossessing it after you leave. Finally, under Oklahoma repo laws, it is not necessary for them to notify you before repossessing your vehicle.

Statute of Limitations on Car Repossession in Oklahoma

In Oklahoma, the statute of limitations on car loan debt is five years. When the statute of limitations has passed, creditors can no longer sue you for the debt or repossess your car. They can, however, continue to contact you in an attempt to get you to pay.

Note that the time for the statute of limitations is dependent on certain actions. For example, if you have not paid in a few months and then decide to send a small payment, the clock will restart.

What Happens After Repossession?

After the vehicle is repossessed, the car will be sent to an auction right away. You are still financially responsible for the difference on the car, or in other words, the amount that you still owe.

You have a few options immediately following the vehicle’s repossession:

  • Pay off the balance on the vehicle
  • Negotiate with lenders to come up with a workable payment plan

It is always best to take preventative action well before you the threat of repossession occurs. As long as your payments are made on schedule, you are protected from actions by your lender. Even then, as the current financial atmosphere is somewhat murky, some of us still find it difficult to stay afloat.

I Can No Longer Make Payments. What Should I Do?

Know your lender’s policy. Most lenders will allow you at least 30 days before they have marked your loan as in default. However, these grace periods will vary, so you must familiarize yourself first with your particular lender’s agreements.

Your other option would be to take the vehicle back to the lender. You will not be on the hook for the costs incurred for repossession, such as towing of the vehicle. This option also does not carry the stigma that a repossession would have on your credit report. You may also wish to consider bankruptcy if the amount to repay on your vehicle is too overwhelming.

Car Repossessed? Call Alexander Hilton & Associates at (405) 725-1441.

Alexander Hilton & Associates can help you with all of your financial and bankruptcy concerns. You do not have to drown in debt—we want to help you stay afloat! Our Oklahoma bankruptcy lawyer has over 20 years of legal experience and is known for getting our clients the right solutions.

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Call our office at (405) 725-1441 and request your free consultation with our experienced car repo attorneys in Oklahoma City at Alexander Hilton & Associates.

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