Bankruptcy, foreclosure, unemployment – all of these have captured headlines in recent months. One area of financial hardship I deal with every day, but one you don’t see much of in the press, is automobile repossessions. Make no mistake, though – the number of “repo”s has been on the rise, especially in the last year. And having your car repossessed – the car you need to get to work or to look for work, and to take care of your family’s needs – can be disastrous.

The fact is, though, an auto loan or lease is a secured loan. That means that even if you miss just one payment, your car can be repossessed without even giving you advance notice. As a consumer bankruptcy specialist, I help clients seek the best possible solutions to all their financial issues, and a lot of the time, as you may imagine, problems with car loans come up.

The first thing to try is contacting the lender to try and renegotiate the terms of your loan to allow you make lower monthly payments lower, make interest-only payments for a few months, or even extend the length of the loan term. Even if a lender were to agree to any of these compromises, that lender would want to know how you were going to make up the difference (possibly in a lump sum at the end of the loan or lease term).

If the lender refuses to alter the terms of your loan and repossesses the car, you’ll be notified where and when the car is to be sold at auction. One option you have is to show up and “redeem” the car (buy it back), by paying, in one lump sum, the balance remaining on the lease or loan, late fees, and repossession costs. Again, you can try to negotiate the price.

A third option is to file a Chapter 13 bankruptcy. If you file before your car has been sold by the creditor, that creditor has to return the vehicle to you. You can then arrange, as part of the bankruptcy, to “buy back” the car over a 36-60 month period.