It’s essential to have the plan to pay back any personal loans or other forms of debt according to the terms you agreed to. Otherwise, you risk hearing from a debt collector.
In most cases, a debt collector won’t be able to repossess your car for simply not making payments. However, there are a few exceptions that may make it possible.
Can debt collectors seize assets?

Debt comes in two forms, secured and unsecured. Unsecured debt is not backed by collateral, such as a car or property. This makes it difficult for creditors to seize assets for missed payments. For example, failing to make payments on an unsecured credit card debt will not give collectors the legal right to repossess your car. Creditors can only repossess property that is specifically listed as collateral on a debt agreement.
Debt that is backed by collateral is called “secured debt.” This means that the creditor can take back possession of the property you used to secure the loan, depending on state law and the terms of your contract.
For example, a mortgage loan is secured by the home, and an auto loan is secured by the car. Suppose you need to make payments on the loan. In that case, the lender can take possession of the collateral (foreclosing on your home or repossessing your car).
what assets can debt collectors take?

Bankruptcy can be a difficult and stressful process, but it doesn’t have to mean giving up all your possessions. Sometimes, your assets may be evaluated and used to repay some of your outstanding debt.
Chapter 11
There are many benefits to filing for Chapter 11 bankruptcy, whether an individual or a business. This type of bankruptcy allows you to reorganize your debt and devise a plan to repay it while keeping your valuable assets. The process typically takes four months, but this timeline can sometimes be extended.
When you declare Chapter 11 bankruptcy, all foreclosures and repossessions of your property are automatically suspended.
Filing for bankruptcy under Chapter 11 is a much more complicated and expensive process than other types of bankruptcy. A filer must pay a $1,738 fee and can expect to incur at least $10,000 in legal expenses. For these reasons, Chapter 11 is typically used by businesses rather than individuals.
Individuals may opt for Chapter 11 bankruptcy instead of Chapter 7 to keep some assets. However, this process is typically more complex and expensive.
Chapter 13
Chapter 13 bankruptcy is similar to Chapter 11 in that it allows for restructuring debts and creating a plan to repay the deficit over the years. However, with Chapter 13 bankruptcy, the filer must make monthly payments from disposable income.
When filing for Chapter 13 bankruptcy, you must submit a list of creditors and amounts owed and your income, property, and monthly living expenses.
One of the key benefits of filing for Chapter 13 bankruptcy is that it can help protect your personal property. When you file a petition under Chapter 13, most collection actions against you or your property are automatically put on hold. This can include stopping a foreclosure proceeding on your home.
Another benefit of Chapter 13 is that debtors are not required to pay their debts in full. The court may order creditors to accept altered repayment terms, which can differ from the terms initially agreed upon before Chapter 13 was filed. This can provide significant relief for debtors struggling to make ends meet.
People who file for Chapter 13 bankruptcy are typically those whose debt payments are unmanageable but who still have a steady income and wish to keep their assets.
If a debt collector tries to repossess your car, what should you do?

Defaulting a car loan by failing to make payments can result in the creditor repossessing your vehicle without obtaining a court judgment. This is because the car serves as collateral for the loan. Additionally, failing to repay a car title loan can lead to the collector taking possession of your vehicle. This is because when you sign up for a car title loan, you give the lender the title in exchange for money.
In some states, your car can be repossessed as soon as you default on your loan or lease. However, it should be made clear in your loan agreement what precisely constitutes a default. The Federal Trade Commission (FTC) has more information on this matter.
The lender is not allowed to repossess your vehicle without first breaching the peace. Breaching the peace can vary depending on location but generally includes not using physical force or making threats. In some instances, simply not removing the vehicle from a closed garage without consent can be considered breaching the peace.
The best way to avoid repossession is to talk to your lender about developing a repayment plan. You can negotiate a revised payment schedule that works better for you. Get any agreement in writing to avoid problems down the road.
Voluntarily returning your car may be an option to consider when an agreement cannot be reached. This could save you from paying additional fees.
In summary

Debt can be a significant financial burden, and missing payments can have serious consequences. Collectors cannot repossess your possessions for unsecured debt, like credit cards or student loans. But other types of debt may result in loss of property, legal action, or damage to your credit score.
Auto loans are secured debt, meaning the car you purchase is used as collateral. This means that making payments on your loan can result in the repossession of your vehicle.
It’s important to stay on top of your debt obligations and to contact creditors as soon as possible in a financial emergency. Doing so allows you to negotiate a new repayment schedule that works better for you.