Car repossession happens when you missed payments on your auto loan. It’s one of the clauses included in the contract with the lender, to which you should abide. Failure to comply begets legal action, which everyone wouldn’t be so happy about.
The creditor has a legal authority to seize the vehicle as soon as the contract is defaulted on the agreed loan or lease. This includes failing to make a payment on time or failing to meet any other contractual responsibilities.
Selling the vehicle
Once the creditor or loan holder has taken possession of the vehicle, they will sell it at a public auction. By law in the Philippines, the creditor must inform the original holder of the vehicle to know what is going to happen with the car. Philippine law also states that in order to reinstate the contract, the participant must pay the amount owed as well as any expenses reflected in the repossession process.
Deficient Paying for the Vehicle
The creditor is allowed to sue an individual who has not followed the contract for any deficiency. Deficiency is any amount that is left over or owed on the contract after the vehicle has been sold. When a deficiency hearing has taken place, the creditor has the right to seize any property or other saved funds to balance out the contract or pay off the remainder of the amount due as long as the court agrees to the terms.
Talking to the Creditor
To prevent a vehicle being repossessed, speak with the creditor. If payments are late, make arrangements or renegotiate a delay in the payment process. A new contract for the terms must be in writing. However, the creditor may still refuse to accept late payments or make further changes to the contract. They may also demand to have the vehicle returned to them immediately.
Breach of Peace
Any "breach of peace" or "public disturbance" is not allowed during the repossession and removing the vehicle from a closed garage or enclosed property without permission from the owner. In many cases, if creditors or loan holders break this part of the law, then they may end up paying the owner if they harmed the owners or the person that holds the vehicle.