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What is "voluntary repossession"?

Produced by Will Komos, Ryan Metz, Kelsea Schimmel with attorney assistance from Raven Moeslinger
Reviewed January 2021

"Voluntary repossession" means you give the lender your car instead of the lender taking it.​ To give your car back voluntarily, call your lender. Before you hand over the keys, ask if they will agree to:

  • Forgive your loan. If they agree, get their agreement in writing. Forgiving your loan may cause you to owe taxes on the forgiven debt.
  • Report your account as “closed-paid” on your credit report.  Your credit score will be lowered if they report it as “delinquent” and “repossessed.”

Your lender must agree in writing. If they do not, even if you give them your car voluntarily, you will probably still owe them money and get negative marks on your credit report.

Some people agree to a voluntary repossession because:

  • You do not have to pay a repossession fee.
  • You can remove all your personal property from the car, and
  • A stranger will not come onto your property to take your car.

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