Voluntary Repossession of a Car in Florida: Should I Do It?

Written By: Attorney Robert Stiberman | Bankruptcy Updated April 18, 2023

Voluntary Car Repossession in Florida

If you have fallen behind on your car loan payments and don’t see a way to catch up, you’re either waiting for the car to be repossessed or considering your options to get out from under the debt. Rather than seeing your car getting towed, you can voluntarily give the car back to the lender.

Is this the best option, or should you consider an alternative to voluntary car repossession? We’re exploring the issue to help you make an informed decision for your future. Read on to learn more about the voluntary repossession of a car in Florida.

Understanding Car Repossession

First, it’s important to understand car repossession and how this can affect your future. When you miss several car payments, the lender can repossess the vehicle. The lender can then choose to sell the repossessed vehicle or auction it off, and if the car sells for less than you owe, you are still legally responsible for the debt balance.

On top of this, you are also responsible for repossession costs, including administrative and processing fees, towing costs, and vehicle storage fees. Once the vehicle is out of your possession, the leftover debt is unsecured, so the lender can sue you for the balance, and they may even be able to garnish your wages to pay the remainder. 

The missed payments, repossession, and judgment of leftover car loan debt are all negative comments on your credit report. All of these can make it nearly impossible to get a car in the future, rent an apartment, and even get a job if the employer runs a credit check. It is crucial to communicate with your lender and try to come up with a solution before it gets to this point.

Should You Choose Voluntary Repossession of Your Car?

Instead of waiting to have your car repossessed, you can choose to surrender the car back to the dealership. Not only does this spare you from having your car towed unexpectedly while you’re at work or in the middle of the night, but it also saves you repossession and towing costs.

Also, when you choose voluntary repossession, the lender may not report the repossession on your credit or classify the repossession so that it shows up in a less damaging way than a standard repo. However, it’s essential to verify this before surrendering your car. 

However, even when you surrender your car, you are still responsible for any leftover balance due after the lender sells or auctions the car. Like a traditional car repossession, if you are unable to pay, the lender can sue, and your wages may be garnished to pay the debt. 

How Bankruptcy Can Assist You with Voluntary Repossession of Your Car

If you are behind on your car payment and unable to catch up in your current financial state, filing for bankruptcy may be the right option, as it can relieve your debt. 

Chapter 7

When you file for Chapter 7 bankruptcy, you can surrender your car to the lender. Once this happens, the debt is unsecured, and the bankruptcy will discharge the debt, erasing it from your record and stopping any wage garnishment.

Chapter 13

With Chapter 13 bankruptcy, your debt is reorganized and restructured, so you can make smaller payments on your debt over three to five years. You may be able to keep your car under Chapter 13 by either: 

• Having a lower interest rate and lower payment for the next three to five years. At the end of the period, the debt is eliminated, and you own the car in full.
• Pay only the car’s actual value without the interest and fees to get a lower payment. Once you complete this repayment, the debt is discharged.

Schedule a Free Consultation with a Bankruptcy Lawyer

Before you choose voluntary car repossession, schedule a free consultation with a bankruptcy lawyer at Stiberman Law. Our team of experienced attorneys can help you understand the Florida repossession laws and provide guidance on the best course of action for your situation.

Bankruptcy may be a viable alternative to car repossession. By filing for bankruptcy, you can potentially stop the repossession process and work out a repayment plan that fits your budget. Our bankruptcy attorney will review your financial situation and provide personalized advice on how to move forward.

Don’t let the fear of losing your car keep you from seeking legal help. The repossession process in Florida can be complex, but our skilled attorneys are well-versed in navigating it. Call us today at (954) 210-4886 or complete the form below to get started.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More