So, you’ve gone through the process of declaring Chapter 7 or 13. Now, you’re wondering whether you can remove repossessions from your credit report. Like most things in the financial industry, it’s not black and white. There are some situations in which they can be erased from your profile and others where you will be stuck with them for years. If you’re looking for a rundown on the repossession process, you’ve come to the right place.
The below article will walk you through everything you need to know about asset seizure. First, it will explain what the process is, and what can be taken from you. Then, you will learn about the circumstances that allow for removal from your credit report, and how to go about doing this. Lastly, you will be walked through the consequences that seizure of your assets can have on you financially moving forward, including what it may prevent you from being able to obtain.
When the founding fathers of America sat down to write the Constitution, they made sure to include a clause requiring that citizens are allowed to file for bankruptcy. They did this because they felt that it was important for indebted citizens who owed money to be able to escape their situation and start fresh. When you file for bankruptcy, it means that even if you literally added up the value of everything you own, you would not be able to pay for what you owe.
The total sum includes liquid cash like dollars and money in a bank account and belongings like cars and homes. Even smaller assets like watches and wall art can be thrown into the pot depending on how they were paid for. Once your judgment is final, creditors and government members may start coming through and taking all of these assets that you have title to. They can then sell them off to pay for missed payments.
Unfortunately, this whole process can deeply injure your personal life. Firstly, most bankruptcy and repossession information is accessible to the public, so there’s no keeping your woes a secret. Additionally, it greatly harms your credit score.
Technically, removing a repossession from a credit report is possible. However, it comes with caveats. Your report contains a comprehensive picture of who you are as an economic entity. All of your purchases, loans, and whatnot are kept track of by credit bureaus. The accumulated information is then used to create your score, which represents how trustworthy of a person you are to lend to. Because there are often thousands of dollars at stake, this number is not easily manipulatable.
Generally, bureaus and other entities involved in your credit identity will only let you remove negative information if it is inaccurate. Even then, sometimes, instead of permitting removal, they will only permit correction. Finding errors pertaining to your recorded repo is one route to potentially getting it wiped from your history. The other route you could attempt to take is negotiation. Both have unique pros and cons. You can evaluate your current situation and decide which option would be best for you to try first. However, your best bet is to give both a shot and see which pans out, if either.
As mentioned above, there are two primary routes you can take when figuring out how to get a repossession off your credit report. You can take a DIY approach to this. Or, if you do not have the know-how, confidence, or time, you can hire someone to assist you in the process.
If you have not tried doing so already, the first step in figuring out how to remove repossession from a credit report is to try and negotiate out of the situation so it doesn’t end up on your report. Unlike most aspects of the credit world, repossessing isn’t blackletter law. It’s an option and oftentimes falls under the discretion of your lender. How many missed payments before repo depends on your creditor. The thing is — lenders do not want to go through repo. Virtually 100% of the time, it causes them to lose money.
It is worth asking your creditor nicely if an arrangement can be worked out in which repossession does not take place. This will involve you having to do things like make car payments and suffer through high-interest rates. However, it’s better for you if your things do not get taken and your report stays clean. And, it would be better for the lender if they actually got your liquid money instead of tangible assets that will only get them a fraction of what you owe them. Therefore, it’s worth a shot to ask. The worst they can say is no.
You have tried negotiating your way out of this pickle and your lender has decided to go through repo anyways. Now what?
The first step in removing a repo from a credit report is actually getting a copy of your report. Your physical report is different from just knowing your score — it contains a line-by-line breakdown of your economic activity. You have probably heard before that viewing this can decrease your FICO score number. However, that’s not always true. Every citizen is actually entitled to a free credit report from each of the big bureaus. That totals up to at least three free copies per year. Depending on who you have accounts with, you can sometimes get even more than three.
Once you get your hands on your report, grab a highlighter and have a seat, because here comes the tedious part. You’re going to read the reports line by line under a microscope. In addition to reading for comprehension of what it is you’re fighting, you are also looking for any potential mistakes on behalf of the entity.
You have gone through and highlighted all of the repossessions (as well as other negative marks) that you want to get off of your profile for one reason or another. Sending a dispute letter, also known as challenging a negative item, is one way to try and get something off of your payment history. Challenges can only be made against negative marks that are actually inaccurate due to the fault of the entity, and not your own.
Once you have identified a potential error on your report, put together a letter containing:
After putting this challenge together, you are going to send it to the entity that made the error. You may have to wait up to one month to hear back. If you are successful, then the negative item will hopefully be removed from your report. At the very least, the item will be corrected. Either way, you should expect to see an improvement in your credit history. If you are unsuccessful, there is still one more thing you can do.
If the above steps failed, and you were not able to negotiate or dispute the repo, there may still be hope for you. All it involves is enlisting the help of a credit repair company. Professionals come in all types and sizes, so it should be easy for you to find a business that has a plan that is right for you. If you’re having trouble picking out, choose from the list below.
Thanks to the Fair Credit Reporting Act, professionals are not allowed to market or promise anything that they cannot actually do. Therefore, you can trust that any of the claims made by the above companies will come to fruition should you choose to hire them. So, if the DIY method to improving your credit has failed, try getting some help and legal advice from seasoned pros.
If you have gone through all of the above steps and nothing has worked, then, unfortunately, you are likely stuck with your repo. In general, it takes about seven years for them to fall off of your profile. Of course, there are things you can do to speed up this process. For example, if you go through voluntary repossession, you may start your clock a bit earlier than it would have started originally.
Additionally, by volunteering to give up your asset, you may also get cut a break by the reporters. Most of the time, the repossession will actually be denoted as voluntary on your report. To potential lenders, this will look more responsible than if you were forced into the position. And, it might affect your credit differently.
If your question of “how to get a repo off your credit” has turned into one of how long it will linger, you are probably not in the best of situations. In all likelihood, you’re stuck with your repo line for seven years, and now you’re trying to figure out how much damage it’s going to do. The good news is that there are definitely worse things that could appear in your account. If you are a person with an average credit history, you can expect to see your score fall around 100 points.
If you started out with a really high score, it might drop up to 150 points, and alternatively, if yours was already poor, to begin with, you may only see a 50 point decrease. If you participated in a process such as a volunteer auto repossession, as mentioned above, you may also get treated with a bit of grace and see a smaller fall in your number.
Now that you know how many points a repossession drops your credit score, it’s time to get into the specifics. Technically, you can get a loan for a vehicle after going through a repo. However, while it’s on your profile, it is going to be significantly harder. You are going to need to show that you are in a better position financially than you were when you went through the repo. This usually involves showing pay stubs with a decent income on them.
Additionally, you still need a decent enough score. Creditors want to see some improvement in your situation, whether that involves refinancing an auto loan after repossession or submitting late payments on time.
Here you will find a similar story as you did above. Technically, repos will never disqualify you from being able to obtain financing. They will just make your life significantly more difficult. If you’re wondering if you can buy a house with car repossession, then yes, you can. However, it is likely in your best interest to wait until it has fallen off of your report if you need to borrow to buy the place.
You should at least give yourself some time to restore your score back to a respectable number. A reasonable amount of time to do this is about a year. With 12 months of proper account management, you should be able to give your number a little boost. In addition to increasing your score, this will also show potential lenders that you have learned from your mistakes and are more reliable now.
Hopefully, the above article has answered all of your burning questions, such as can a repossession be removed and how. Perhaps you are stressed about your current score because you need to obtain a large amount of financing for a future project. Or, you need an auto loan and with a repo on your profile, you’re not going to get one. The above process should be sufficient to get you on the right track.
Remember that you do not have to walk this journey alone. There are hundreds of people who are trained in improving your financial standing. They know all of the special tips and tricks to remove repos that you may not be able to on your own. Whether you want to do it DIY style or with professional assistance, get started today and achieve your economic goals!
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Founder of Credit Repair Partner. I worked in the credit repair industry for about 10 years. I love, helping people become smarter about their credit and finances.