Failing to make your car payments on time may give your lender the right to take your vehicle without notification or going to court and the rights and obligations that you have as someone who has a car repossessed?
The answer to that question will depend on the terms of your loan or lease contract. But you can rest assured that vehicle repossessions are very common with Debt.org reporting 2.2 million repossessions in 2021 – nearly 5500 cars a day.
When you’re in default, your lender may have the right to repossess your car, but they aren’t permitted to breach the peace while doing it.
Many people run into financial struggles and are either late on making payments or can’t make them at all. While it’s always best to talk to your lender before things spiral out of control, you have legal rights and options when your car has been repossessed.
What Happens After My Vehicle Has Been Repossessed?
After the repossession, your lender can choose to keep it to cover your debt or sell it. Some states require that you must be notified about it while others have no stipulations in place.
You may be entitled to buy your vehicle back by paying the full amount you owe. This would include the past due payments, the remainder of the debt owed, and the costs related to repossession of the vehicle such as storage, attorney fees, or sale preparation.
If your car is going to auction, you can also bid on it at the sale.
What Are My Legal Options in a Vehicle Repossession Situation?
In most states, the laws permit vehicle repossession without any notice and at any time of day or night. However, they must not breach the peace, which is generally a loud and heated confrontation that disturbs others or creates the risk for violence.
If a repo man threatens violence or takes violent actions, this would be a breach of peace. In many places, if they break and enter by cutting the lock off your gate or picking the locks on your garage, this is also considered a breach.
What many car owners do not realize is that your protest of a repossession requires the repo man to stop their actions and forces the lender to go to court to obtain an order for repossession of your vehicle. Should they carry on with disregard to your protests that order them to stop, it may be found as a breach of peace. This may entitle you to compensation.
Some states don’t permit repo men to enlist law enforcement to assist while others require it. In either scenario, depending on the location, this could be deemed a breach of peace as well.
What About the Items I Keep in My Vehicle?
While it’s not advised to keep valuables in your car to prevent being targeted for theft, the creditor that repossesses your vehicle is not allowed to keep or sell any of your personal items found inside.
If they can’t account for the things you had in your vehicle at the time of repossession or they have made a wrongful repossession, you may be able to seek compensation.
What Can I Do to Protect Myself Prior to a Repossession?
If you’re behind on your car payments and worry about having your vehicle repossessed, or your vehicle has already been removed from your property, you still have consumer rights. These rights can be violated at any time during the process, and the best way to protect yourself is to have the right documentation and evidence.
For those that have already had their vehicle repossessed, the best course of action is writing down all the facts about what happened. Include where your car was at the time of repossession, whether you were present at the time, if there was a breach of peace, and if you were actually behind on your payments. Should you have your vehicle repossessed and payments are up to date, you should prepare to show evidence of your payments.
Having your original loan agreement along with all other documents associated with it will also help. It can provide evidence of what is or isn’t permitted in your agreement.
Visual evidence is also ideal such as through photos, home surveillance cameras, witness statements, or police reports. You should gather all written correspondence you’ve received from the lender or get copies of what you sent them. Phone records can be helpful too in showing whether or not anyone tried to contact you about your late payments or repossession.
An attorney that specializes in consumer protection rights can be a tremendous help during this difficult time. They can review your case and determine whether you have the right to compensation for this ordeal.
Source: Thompson Consumer Law Group, AZ