Facing repossession can be stressful, but it doesn’t mean you’re out of options. Whether you’ve missed payments or your property has already been taken, you can take steps to regain control. Fast action is crucial—contact your lender to discuss payment options or even request a temporary deferment.
The right solution depends on your financial situation, the stage of the repossession process, and your ability to work with your lender. Understanding your rights and exploring available options empowers you to make informed decisions. No matter the challenge, solutions are within reach.
If you’re worried about repossession, you’re not alone. Many borrowers face financial challenges that make it hard to keep up with monthly payments. Here are 10 strategies to help you stop repossession and possibly keep your asset—whether it’s a car, home, or other property.
| Option | Best for |
| Refinance the loan | Lowering payments to improve affordability |
| Make up the payments | Quickly catching up when you have funds available |
| Request a loan modification | Long-term financial hardship |
| Temporary deferment | Short-term financial setbacks |
| Request a fee waiver | Reducing costs when fees make repayment unaffordable |
| Sell your property | Avoiding repossession if the value exceeds the loan balance |
| File for bankruptcy | Halting repossession when other options are unavailable |
| Surrender the property | Avoiding repossession by voluntarily returning the asset to your lender |
| Reinstate the loan | Resolving a repossession by paying all past-due amounts |
| Redeem the item | Repaying the full amount owed to stop repossession and get your property back. |
Refinancing involves replacing your loan with a new loan with better terms or lower monthly payments. If your payments are too high, this can help you manage them.
However, lenders consider your credit score and the condition of your current credit tradelines before approving a refinance.
Pros
Lower payments improve affordability.
Potential to lower the interest rate.
Less credit impact compared to default.
Cons
Longer terms may increase total interest paid.
Usually requires good credit to qualify.
Possible fees for the refinance process.
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Catching up on missed payments is often the simplest way to stop repossession. This involves paying all overdue amounts, including fees. Setting a repayment date can show your lender you’re serious, but failing to follow through may make lenders unwilling to negotiate in the future.
Pros
Avoids severe credit damage from repossession.
Lets you keep your property without modifying the loan.
Rebuilds trust with your lender.
Cons
Requires a lump sum, which may be hard to gather.
Past-due payments still hurt your credit score.
Delayed repayment can lead to repossession.
A loan modification adjusts the terms of your loan by lowering the interest rate or extending the term. This option works well if your financial hardship is long-term or permanent, such as job loss or health issues.
Pros
Reduces monthly payments to a manageable level.
Can prevent repossession without refinancing.
May avoid penalties or late fees.
Cons
Requires proof of financial hardship.
Not all lenders offer modifications.
Extended terms may increase total loan costs.
A deferment allows you to pause payments while dealing with a short-term financial issue, such as medical bills or job changes. No matter the issue, communicating with your lender early may make it more willing to work with you.
Pros
Buys time to recover finances without repossession.
Prevents immediate credit damage.
May keep your loan in good standing.
Cons
Temporary fix, not a long-term solution.
Interest may accrue during the deferment period.
Often requires a history of on-time payments.
If you owe significant late fees and penalties, you can try negotiating with your lender to waive some of these costs. Demonstrating how waiving the fees would allow you to bring your loan current may improve your chances.
Pros
Reduces the total amount owed.
Helps you catch up on payments faster.
May stop the loan from going to collections.
Cons
Lender approval isn’t guaranteed.
May require immediate or scheduled repayment.
Harder to negotiate with a history of late payments.
Selling the car, boat, motorcycle, or other item can prevent repossession if you use the proceeds to repay the loan. This works well if the market value exceeds the amount you owe.
Pros
Avoids repossession and its credit impact.
You may get more value than a lender auction.
Loan is repaid in full.
Cons
Requires effort to sell fast.
May need a replacement.
Asset must be worth more than the amount owed.
Bankruptcy is a last resort to halt repossession. Chapter 7 or Chapter 13 filings may let you reorganize or discharge debt.
Pros
Stops repossession immediately with an automatic stay.
May allow you to keep your property, depending on the type of bankruptcy.
Can provide a fresh start by reducing other debts.
Cons
Long-term credit damage.
Court approval and legal fees are required.
Bankruptcy laws vary by state.
Voluntarily giving up the item is an option to avoid forced repossession. While your credit report will reflect the surrender, it often looks better than a repossession. You may still owe the deficiency balance if the car sells for less than the loan amount, but you could negotiate to reduce it.
Pros
Avoids repossession fees.
Gives you more control over the process.
May help negotiate a lower deficiency balance.
Cons
Any remaining balance must be repaid.
Negative impact on your credit.
Requires alternative transportation.
If the lender has already taken your item, you might still get it back by reinstating the loan. This requires paying all missed payments, fees, and repossession costs to bring the loan current. Reinstatement must happen before the lender sells your item.
Pros
Lets you keep your property.
Restores original loan terms.
Avoids additional credit damage.
Cons
Requires a large lump-sum payment.
Not available from all lenders.
Doesn’t address affordability issues.
Even if your item has been repossessed, you can reclaim it by redeeming it: paying the entire remaining balance and any associated repossession costs. Redemption is only possible before it’s sold at auction.
Pros
Grants full ownership to you.
Ends the loan and repossession process.
Prevents your property from being sold for less than its value.
Cons
Requires a significant upfront payment.
Unrealistic for many borrowers due to cost.
Does not erase past late payments on your credit.
In my experience, the most effective options to stop repossession are refinancing the loan to make payments that fit in my client’s budget (specifically if they’ve had a life change resulting in an income reduction) and deferment.
These two options are more widely used because financial hardship is caused by a reduced income stream or a temporary setback (such as a change in jobs, moving, or health issues).
I recommend first considering these two options due to their minimal impact on your credit. In addition, these are two preventive measures you can take to avoid experiencing the dramatic consequence of losing your property.
Erin Kinkade, CFP®
Yes, a repossession can be delayed in certain cases, but it depends on your lender’s policies and your current financial situation. Some lenders may offer temporary forbearance, a loan modification, or a deferment plan if you’re experiencing financial hardship.
Reaching out to the lender before missing payments is crucial. The lender might be willing to adjust the terms, allowing you to catch up on payments or avoid repossession.
It is possible to reverse a repossession, but timing and lender policies are critical. Some lenders allow you to reinstate the loan by paying the past-due amount along with any repossession-related fees. Others may require you to pay the entire loan balance to regain possession.
In some cases, filing for bankruptcy before the sale of the repossessed item can temporarily halt the process and might offer options to recover your property, depending on the bankruptcy type.
We don’t recommend hiding the item to avoid repossession. It could lead to more complications. Most states have laws that prohibit concealing property to prevent repossession.
If your lender has a valid repossession order, attempting to hide the asset might be considered “hindering a secured creditor,” which can lead to additional legal penalties or a breach of contract. Instead, it’s best to communicate with the lender to discuss possible solutions for repayment or delay.
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