What if my car was in the tow yard and the bank repossessed?

Then you don't have a car anymore. The bank will resell it and may in addition hold you responsible for the difference between the proceeds (or the fair market value, whichever is higher... they're not allowed to sell it to an officer of the bank for a dollar, for instance) and what you still owed on the car. They can also add in the repossession fees (towing, impound/storage fees, and so forth). If they sell it for more than you owed plus the fees, then you won't be charged for it but you also won't get the excess; they get to keep that. In many places you have the legal right to recover any belongings of yours that were in the car at the time (this normally doesn't apply to items which are considered part of the car, such as high-performance replacement parts) ... at least in theory. In practice, if anything turns up missing, the burden will be on you to prove the missing items were actually there ("No, Your Honor, I swear, I had five ninety-pound gold ingots in the trunk!") when the car was repossessed.