In the state of Mississippi, your lender can repossess your vehicle if you don’t stay on top of your loan payments. This means that they can take the car from your property at any time as long as they don’t threaten you or disturb your neighbors. Repossession isn’t just bad for your livelihood; it also affects your credit score.
What happens to your credit if the lender repossesses your car?
If you’re not keeping up with your car payments, the late payments have already damaged your credit score. Some lenders resort to tactics like repossession and wage garnishments to get their money back. Once they repossess your vehicle, your credit score will take another hit.
Repossession stays on your credit score for the next seven years. Anyone can view this statement on your public records, making it harder for you to secure a loan or open a line of credit. This could include mortgages, credit cards and personal loans. Even if you give your car back to the lender, this still counts as repossession.
For this reason, it’s best to stay on top of your payments as much as possible. If you’re drowning in debt, you might want to talk to an attorney about filing for bankruptcy. Your credit score will take a hit, but you might be able to avoid giving up your vehicle, and your other debts could end up being discharged.
When should you think about filing for bankruptcy?
Contrary to popular belief, filing for bankruptcy doesn’t destroy your credit for the rest of your life. In fact, filing for bankruptcy could help you get on top of your bills so that you can build up your credit later. You might want to talk to an attorney about filing for bankruptcy in the future. Even if you’re not ready to file now, you’ll know that you always have that option.