If you are like most car owners, then you probably had to take out a loan in order to finance your new car. This kind of loan obligation is called secured debt because in taking out your loan you also pledged your car as collateral in the event that you fell behind on your payments. As a result, your lender is legally allowed to repossess your car if you fail to make a payment on time or qualify as in default under the terms of your loan contract.
Your creditor is not permitted to repossess your vehicle if you both agreed to change the terms of your original loan contract. However, these new loan terms must be laid out in writing in order for them to be legally valid. If you are in default, your creditor may come on to your property and seize your car without notice as long as he or she doesn’t use physical force, threats, or remove the vehicle from a closed garage without your consent.
Filing for bankruptcy can help prevent the repossession of your assets.