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Repossession: Why it happens, what you can do, and your rights before, during and after repossession

The following information guide you through dealing with a car lost through repossession.

It is critical that you understand if your vehicle is repossessed the car will be sold at a dealer price at auction and you will be responsible for the difference you owed on the car plus repossession expenses minus the very low sales price.

People are hit with very large amounts due from the repossession deficiency. For many the amount due is so large that bankruptcy is often the most logical way to deal with the massive debt.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

Losing Your Vehicle By Repossession

If you fail to make payments on a car loan, or anticipate a problem paying in the near future, you should be familiar with the process of repossession and what rights you may have. This publication will cover your rights before and after repossession, starting with the security agreement you signed when you bought the car and ending with your rights after a creditor sale of your car.

Specifically, this publication will answer the following:

  • How does the creditor have a security interest in your car and what does this mean?
  • How can you default on a loan?
  • When can you reinstate the contract or redeem the car?
  • Do you have rights to be notified before repossession?
  • How can you stop self-help repossession?
  • What are your rights before and after the sale of your vehicle?

It is important to know that every state has a different mix of laws on this subject and the rights discussed in this publication may or may not be available in your particular state. You must check with an attorney in your state to see which of these rights is available to you.

Did You Sign a Valid Written Security Agreement?

A car can only be repossessed by the lender that took the car as collateral for your loan. None of your other creditors can repossess your car unless you have a security agreement that specifically states your car is collateral for that loan. For example, if you are delinquent on regular credit card debt, the credit card company cannot repossess your car to collect the credit card debt.

When you buy a car using a car loan, you sign a security agreement. For the agreement to be valid, it must describe the type of “collateral” (the car) and the value given, and you must have “rights to the collateral.” (You have rights to the collateral if the car belongs to you, not to someone else.) Accordingly, if a parent buys a car for her daughter, the daughter has all rights to the collateral and must sign the security agreement. If the daughter does not sign the agreement, there is no valid security interest and the creditor may not be able to repossess the car.

It is important to check the agreement to see if there are any mistakes or omissions. If there is a mistake in the security agreement that makes the agreement invalid, the creditor cannot repossess the car, even if you defaulted on the loan. You should have received a copy of the agreement at the time you bought the car, but if you no longer have a copy of your security agreement, you can ask your creditor for a copy. Although you may not have a legal right to another copy of the agreement, you should contact your local attorney general or consumer affairs office if you believe there may be a problem with the agreement and your creditor won’t give you a copy.

Repossession: Why it happens, what you can do, and your rights before, during and after repossession

Did You Default on the Loan?

Before a lender can repossess your car, you must default on the loan. The usual way that a consumer defaults on a loan is by failing to make a monthly installment payment. (If you are in this situation or close to it, see the publication called “When You Can’t Make Your Car Payments.”) But there are other ways that you can default, and these are spelled out in the security agreement that you signed when you bought the car. Some examples include: failing to purchase insurance, losing or destroying the car, selling the car or moving the car to another location without the lender’s permission. If you don’t understand why or how you defaulted, you should look at your agreement to see what constitutes a default.

There are occasions where you may default under the agreement but your creditor still cannot repossess your car. Many states find that if the creditor has accepted late payments from you before, the creditor cannot later declare that you defaulted without giving you reasonable notice. In other words, the creditor would have to tell you that it would consider all future late payments as your defaulting on the loan.

In addition, there can be no default if the “underlying obligation is extinguished” (you paid off the loan), the contract is voided under the laws of your state or if you notified the creditor that you are withholding payments because of the creditor’s breach of warranty. You should check your state laws for additional rights since your state may further restrict the grounds for default.

Did the Loan Accelerate?

Assuming you defaulted by not paying on the loan, it is important that you know whether or not your security agreement with the creditor has an “acceleration clause.” Once a loan has accelerated, you can no longer “cure” the default by just paying the past due amount. Instead, the lender can demand the entire balance of the loan due or repossess the vehicle. Your state law determines whether or not your creditor must warn you beforehand that your loan will accelerate and whether or not your creditor must tell you that you have a “right to cure” the default.

The first thing you should do is check your security agreement to see if there is an acceleration clause. A loan will only accelerate if there is an acceleration clause between the debtor and the lender. If there is no acceleration clause in the agreement, the creditor can only demand that you pay the past due amount. The acceleration clause must be clear in the agreement and state that if the consumer meets one of the grounds for acceleration as defined in the agreement, the creditor may accelerate the debt. Grounds for acceleration can include such things as: your commencement of bankruptcy proceedings, your refusal to allow the creditor to inspect the car or your default on the loan, as defined in the agreement.

Upon acceleration, the full loan amount would become due immediately. It is unlikely that a consumer could come up with that sum in a short period of time and acceleration almost always results in default on the total balance of the loan. At that time, the lender can repossess and sell the car to recover the total remaining loan balance.

The creditor can even accelerate “at will” if he truly believes your prospect for payment is impaired. For instance, if the creditor believes the car has been abandoned, the creditor can accelerate at will to recover the total amount owed. Before a creditor can do this, he must perceive a deterioration of the consumer’s financial condition since the loan was made. Check your agreement for a provision allowing acceleration at will.

Did You Get Notice of Acceleration and the Right to Cure?

Under the terms of your agreement, the creditor may not have to tell you that your loan is accelerating. Most agreements have a provision waiving the consumer’s right to notice of acceleration.

Accordingly, a creditor can demand that you pay the full amount of the loan and could repossess the car without ever notifying you. Check your agreement. If there is no waiver, the creditor must notify you after default to tell you that the loan will accelerate, and give you a reasonable opportunity to pay the defaulted amount before acceleration.

Even if you waived notice of acceleration in the agreement, you still may get some help from your state laws. Some state laws – usually called “right to cure” laws – require notice before acceleration, and these laws override the waiver provisions of your agreement. Under a right to cure law, the creditor must allow you to pay back payments plus delinquent charges and reinstate the loan within a particular amount of time before the note will accelerate. This means that your creditor would have to give you notice before acceleration AND give you the chance to correct the situation.

If your state does not have a right to cure law and you waived your right to notice in your security agreement, your creditor still may have to tell you about your right to cure the default. The waiver may not stand if there is any inconsistency about a right to notice in other provisions of the agreement. For instance, the waiver would be invalid if there are provisions in your agreement that mention “on demand,” implying that you have the right to notice of a right to cure.

State laws may further restrict grounds for default and acceleration and may specify the number of times that you may have the right to cure.

Was the Creditor’s Self-Help Repossession Lawful?

If there was a valid security interest, you defaulted on the loan, and the loan accelerated, you risk creditor repossession. In most states, a lender can seize a car without first having to go to court. This is called “self-help repossession.” Creditors must comply with many technical requirements to repossess your car in this manner. Some state requirements that may protect you against self-help repossession include:

  • Express consent. Some states do not permit repossession without the consumer’s express consent (usually in the signed agreement). You consent if you specifically knew of the creditor’s right to repossession and specifically knew that the creditor could repossess your car without having to go to court first.
  • Military personnel or dependents. If you are in the military or are a dependent, you are protected by the federal Soldiers’ and Sailors’ Civil Relief Act. This law, however, provides only temporary and partial relief. If you bought a car before you entered the military service and default on your car payment while in the military, your creditor must take you to court to repossess the car. However, your creditor can still use self-help repossession to repossess a car that you bought while you were in the military. But you still may be protected in another way: standard military policy requires that any repossessor entering a base must be accompanied by military police. If you are present during a self-help repossession, a court may find that the presence of a military official forced you to consent to repossession, which is wrongful repossession.
  • Native Americans. Native Americans may be protected if tribal law prohibits self-help repossession.

Did the Creditor Breach the Peace During Self-Help Repossession?

A creditor cannot breach the peace when he repossesses a car. Breaching the peace includes many situations, such as:

  • Touching or pushing you.
  • Damaging your property during repossession.
  • Tricking or lying to you, in some states. A few courts have held that laws cannot encourage lying and trickery to repossess collateral. Courts are divided as to whether a repossessor can trick you to take your car. In one instance, a creditor breached the peace when he pulled the debtor’s car to the side of the road, rode back with the debtor to the dealership and seized the car while the debtor was inside. In another case, a creditor breached the peace when he lied and said he was a government official. However, some courts have found that there was no wrongful repossession when the creditor lied and said he was taking the car for repairs.
  • Threatening you if you feel immediate fear. For example, a creditor’s threat to seize your car at some future time does not put you in immediate fear, so there is no breach of peace.
  • Ignoring your objections. If you, your relative or your friend objects to the repossession but the creditor still repossesses the car, he breaches the peace. You should object at the time the creditor takes the car. If you object after the creditor took the car, it is too late. If a sheriff or other government official is present, don’t resist his seizure of the car, but verify the official’s authenticity.
  • Entering a closed garage. Even without physically breaking in, a creditor breaches the peace when he enters a closed garage. Generally, there is no breach of peace if the creditor takes the vehicle from the public street, a parking lot, a private driveway, an open garage or a carport. A creditor’s trespass can be a breach if there is a potential for immediate violence.
  • Police presence. If the creditor brings a police officer not through a paper of the court and the presence of the officer so intimidates the debtor as to have “forced” him to consent to repossession, the creditor breached the peace.

Your state laws may further limit who can engage in self-help repossession. For example, a state law may permit self-help repossession by licensed personnel, employees of the creditor or automobile dealers only.

If your creditor wrongfully repossesses your car or breaches the peace, depending on your state and its laws, the court may not allow the creditor to keep the car or to collect a deficiency, may stop the subsequent creditor sale of your car and may force the creditor to pay you for the market value of the vehicle at the time of seizure, or pay for damages for your loss of use, mental anguish or inconvenience. You could also be reimbursed for attorneys’ fees.

Note: Unsecured Property Repossessed with the Car. Cellular phones, stereos and other items attached to your car can be repossessed only if the security agreement specifically covers these items. The creditor must return personal property and is liable for any loss of use of property or any damages to property while in the creditor’s custody. If your creditor seized unsecured property with the car, you should inventory the missing property and demand its return.

If your creditor refuses, you can sue the creditor for the property’s value, for your loss of use or for any damages to the property while it was in the creditor’s custody.

Did the Creditor Properly Dispose of the Car After Repossession?

After repossession, there are six possible ways that the creditor can dispose of your car.

  • Reinstatement. After repossession, your state law may give you the right to reinstate the contract by paying the amount past due. If this is the case, the creditor must give you notice of your right to reinstate and the amount due. You have a particular time period, usually 15 days following repossession, to reinstate the contract. You may only get one opportunity to reinstate a contract. If the creditor does not comply with reinstatement procedures, he may be barred from later obtaining a deficiency judgment and may even owe you money.
  • Redemption. Every state gives you a chance to redeem your car by paying off the entire loan plus reasonable repossession and storage charges at any time before your creditor sells or otherwise disposes of the car, even if you had voluntarily surrendered the car. A written waiver of the right to redeem is ineffective unless you signed a written waiver AFTER you defaulted on the loan. Unfortunately, this right to redeem does not help most consumers who have their cars repossessed due to money troubles and cannot come up with a large lump sum of money. Before you redeem, you should know the loan amount, repossession fees, costs associated with the sale, and reasonable attorneys’ fees and legal expenses. If the debt has accelerated, the creditor is not entitled to unearned interest or insurance payments that are not owed because the note has been paid off early. Remember: you may be better off buying your car at the repossession sale than redeeming. The sale price at a creditor sale may be less than the amount you owe. However, you will still be liable for any amount of your loan obligation and repossession costs that are greater than the sale price of the car (the deficiency).
  • Strict Foreclosure. Your creditor could keep your car in satisfaction of your obligation, which is called “strict foreclosure.” If your creditor elects strict foreclosure, you would not owe the creditor any payments, although your creditor can keep all prior amounts that you paid. If the creditor intends to elect strict foreclosure, he must tell you in writing. You can object to strict foreclosure in writing within a certain amount of time, depending on your state, usually within 21 days of the notice. You should object to strict foreclosure if you believe that you or the creditor could get a sale price that would cover the remaining amount that you owe plus any repossession, reconditioning and sale costs.

    If your creditor has repossessed your car but has not disposed of it in any way, it may no longer be worthwhile to sell the car. You can argue that the creditor, in effect, elected strict foreclosure because his holding onto your car for so long made a subsequent sale commercially unreasonable. This is called “constructive strict foreclosure.” If you successfully argue constructive strict foreclosure, your creditor would not have a claim to any deficiency. Even if you live in a state that does not have laws on constructive strict foreclosure, many courts will treat the creditor’s repossession as extinguishing the debt for the value of the car if they do not dispose of the car within a reasonable period. (See “delay of sale” under the discussion of Creditor Sale).

    If you have paid at least 60 percent toward the car, your creditor cannot elect strict foreclosure.

  • Judicial Sale. A creditor could dispose of your car though judicial sale. A creditor will rarely do this since it adds extra court costs and a creditor can generally sell the car without having to go to court first.
    Consumer Sale. Your creditor may allow you to sell the car. You should take advantage of this if you believe that you can get a better price on your own. In fact, it may be unreasonable for a creditor NOT to let you sell the car if you can get a much higher price than your creditor.

  • Creditor Sale. The final way that a creditor can dispose of your car is by selling the car at a public or private sale. During the sale of your car, the creditor must follow certain rules. If the creditor does not, you can sue the creditor to stop the sale and to recover money damages. Two of the most important rules are: (1) the creditor must give you notice of the sale, and (2) the sale must be “commercially reasonable.” Both of these rules are discussed in detail below.

Did You Get Notice of the Creditor’s Sale?

Notice of sale is very important as it tells you when you will no longer be able to redeem your car. If you do not act before the date of sale, you will lose the car. Notice of sale may be the first time that you hear from your creditor after repossession, if you waived your right to notice of acceleration or if your state does not have a “right to cure” law.

The creditor must give “reasonable notification,” which means he must give you sufficient time to take appropriate steps to protect your interests. The timing of notice differs in each state, but creditors usually give notice of sale 10 days beforehand. The notice must be written and accurate in every respect, and most courts require that it specify whether it will be a public or private sale and give details of where and when the sale will take place.

Some courts have barred the creditor from collecting a deficiency judgment where the creditor failed to send the debtor notice even though the debtor actually knew about the sale from another source. Courts have also forced the creditor to pay the debtor the amount that the sale price is diminished because of inadequate notice.

Was the Creditor’s Sale Commercially Reasonable?

The creditor sale must be “commercially reasonable” in every way. Commercial reasonableness is not defined, but it is more than creditor convenience. Commercial reasonableness includes the following:

  • Creditor use of car. A creditor’s use of the car before sale could be commercially unreasonable. When the car is in the creditor’s custody, the creditor has a duty to use reasonable care. If the car is destroyed while in the creditor’s possession, the creditor may no longer be entitled to any deficiency. In general, the creditor cannot drive the car unless it is to preserve the car’s value – never for personal reasons.
  • Creditor reconditioning the car. It may be commercially unreasonable for a creditor to sell the car “as-is” if preparing the car in some minimal way could significantly increase its value. The creditor may have to “recondition” the car, including polishing, cleaning, tune-ups and paint touch-ups. At the same time, you should make sure the creditor does not put too much work into reconditioning the car, because you will end up paying for all reasonable expenses of car preparation for sale. The amount of reconditioning should be proportionate to the value of the car or must result in a significant increase in the sale price.
  • Creditor delay of sale. The creditor cannot unreasonably delay the sale of the car. If the creditor holds onto a car for too long, the creditor may be barred from collecting any deficiency and may have to accept the car as settlement for the rest of the amount due on the loan. (See “strict foreclosure” under Creditor Disposition). On the other hand, a sale that is too hasty could be commercially unreasonable if it results in inadequate advertising or in a failure to produce a sufficient number of bidders. If the debtor already paid 60 percent or more of the loan, the sale must be within 90 days. To determine whether a delay is commercially reasonable, check how much the car has depreciated during the delay, and consider the storage costs and other seasonal and regional variations.
  • Creditor choice between public and private sale. The choice between a public and private sale must be commercially reasonable and must maximize sale proceeds. However, a low sale price by itself is probably not enough to prove that a sale was commercially unreasonable. You should check wholesale pricing guides, like the publication put out by the National Automobile Dealers Association, to determine whether a sale price was commercially reasonable.

    The creditor must make the car available for inspection before a public auction. If you see that a creditor’s preparation for sale is clearly inadequate or if the creditor appears to be selling to itself at a low price, you can try to stop the sale. At a public sale, you can bid for your car. You can also offer to purchase your car at a private sale.

Is There Any Deficiency After Creditor Sale?

After sale of the car, the sale proceeds would first be applied to the reasonable expenses of repossession, then to reasonable expenses of the sale, then to satisfaction of the debt. Whatever is left over (the surplus) must go to the debtor. If there is not enough to cover all these expenses and the remaining debt, the debtor may owe the creditor the amount of the loan and expenses that exceed the sale price, called the deficiency. Under state laws, however, the creditor’s right to a deficiency may be restricted. Some state laws preclude the creditor from getting a deficiency, or may limit the deficiency amount if the creditor elected “strict foreclosure,” if there was a commercially unreasonable disposition of the car, or if the creditor did not comply with specific notice requirements under state law.

If you owe a deficiency, you should recalculate the deficiency amount to make sure it is correct. Make sure the following is accurate:

  • The remainder due on the loan before adjustments. Obtain the original credit documents, recalculate the total amount due and make sure the credit rates are not higher than your state limits.
  • Unearned interest rebates. The total payment of a pre-computed loan includes interest payments over the full loan term. When a creditor accelerates the loan payments, the creditor is seeking payment earlier than scheduled so the amount of interest that you owe decreases. The creditor should rebate this unearned interest to you, and the rebate should be computed based on a formula specified in the loan agreement or based on state law, whichever is more favorable to you, as of the date of acceleration.
  • Interest and penalties after acceleration. After rebating the unearned interest, your state’s laws or the credit agreement may authorize the creditor to charge interest on the amount due from the date of acceleration until you repay this amount. It depends on state law and the contract, but usually late payment charges will not be permitted after the time of acceleration or at the time a deficiency judgment is rendered. A creditor cannot charge both late-payment and extra-interest charges for the same period.
  • Prepaid insurance premiums. You should cancel any prepaid insurance and get a rebate. Also, you should make sure that the creditor does not charge for reconditioning and repairing a car if it is covered by the car’s service contract or extended warranty.
  • Value of car. Make sure you are credited the sale price of the car at retail, not the estimated value.
  • Expenses from repossession and sale. All expenses must be reasonable, including all repossession, storage, repair, reconditioning and advertising expenses. The creditor cannot charge you more than the amount the creditor was actually charged. Expenses for sale should be the same as for the creditor’s non-repossessed cars. Any attorneys’ fees and legal expenses must be reasonable and are governed by the credit agreement and by state law.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

Repossession: Why it happens, what you can do, and your rights before, during and after repossession
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • carol

    If I had a car repossed and still owe money after selling it can they take my current car for payment

    • http://GetOutOfDebt.org/ Steve Rhode

      Is this a credit union you owe?

  • johnjr37

    i purchased a car over 2 years ago. i paid cash for the car from the owner. it had a clean title. i go to dmv they take the title charge me tax and fees. they told me because it was a p.a title and i live in ny that it will take months for me to get the title. make a long story short this is my first car i own. ove a year of owning the car i call to find out why my title didnt come. i find out that the guy sold me a car that had 2 liens. they wont re-register it until i call the lien holders. i did 1 asked for a copy of the registration. the other wants a bill of sale. i put in for release for bill of sale. the 1 place said they would call me back. 3 weeks later they repo my car out the driveway. i paid 5 grand for the car and put about 5 grand into it. they didnt call me and they messed up my mother inlaws property outside.

  • Klmflyer

    My dad passed away and my mom had to file for bankruptcy. My folks used their car as collateral on a loan they used to help pay for hospital bills prior to his death and her filing. The bank put a repo on my mom’s credit, but they did not actually repo the car because it was my mom’s only transportation. They still have her pink slip. The car is barely running, and we don’t know what to do with it if it cannot be repaired. Do you have any ideas?

    • http://GetOutOfDebt.org Steve Rhode

      Since they hold the title to the car, let them take it back. Otherwise, contact them and get in writing how they want you to dispose of it considering they are holding the title. It doesn’t sound like the car has much value to it.

  • lildread09

    can a dealer repo myr car if idid not pick up the license plate and the insurance go out from them the car is payed up untill may 2013. (In Jacksonville fl)

    • http://GetOutOfDebt.org Steve Rhode

      I’m afraid I don’t understand the question.

  • http://www.facebook.com/andreyalishayev Andrey Alish

    I have 2 judgements against me from credit card debts i was contacted by us marshall by mail that said they can reposess my car and garnish wages .are you saying that if i buy a car that the credit card companies can not reposses my car for judgements ?and i currently dont have a car but if i buy a car it wont be effected by the debt in NY?

  • Joe

    Hello i had my car repo’d and I was never given papers on repo? What are my rights and am I entitled to copy’s that I signed?

  • Beverly

    The loan company repo’d my car last June. Now they gave me a settlement amount and said when paid in full them they will send me the tile. I thought when they respo’d that I could not have the car back is that true/ Or if I pay for it, will I get the car?

    • http://GetOutOfDebt.org Steve Rhode

      I would confirm they still have the car in their possession before you do anything.

  • Robb

    If my car is repossesed and state sales tax is still owed on it, is that now the dealer or banks problem? Am I liable for it?

    Robb

    • http://GetOutOfDebt.org Steve Rhode

      You are responsible for any fees or charges incurred before the car was disposed of and transferred out of your name.

      • blazafire89

        In that case, how would you pay the past fees? Through the DMV? I bought a car and it was repossessed before I paid sales tax on the vehicle.

      • http://GetOutOfDebt.org Steve Rhode

        Yes.

  • http://www.facebook.com/lucky13dan Daniel Duhigg Jr

    My wifes car was repossessed and sold befor the 15 day period she had to pay the past due ballence what can she do ?

  • Whollycrap77

    even though i only had an accutal balance owed of six thousand dollars wells fargo bank ran it up to eighteen thousand dollars in lawyer fees,interest and pentalies.

  • Peppercornbarbie

    When I traded my Avenger in for my Stratus the dealership told me that the title I had for the Avenger wasn’t good enough and I needed to go purchase one. This would’ve coost me $150 plus my temp tags on the Stratus were about to expire. The dealership refused to send my paperwork for my license plates to the state of COso I could get my plates saying that they were witholding the paperwork until I gave them a purchased title for th Avr. This in turn resulted in my license getting suspended because the dmv did not have record of the Stratus belonging to me, only the Avenger which the dealership had possession of. As a result of that I was arrested 3 times for driving w/o a license and my Stratus was impounded. The finance company put a hold on my car even tho I offered to pay the one pmt I was behind and get one ahead. They are demanding the full amount of the loan and impound fees. The car is still sitting in the impound incurring daily storage fees. What can I do to get my car back? I have an atty for the driving charges but I cannot afford to give the finance company $6000.00

  • tina

    My was repoed but I have half of the money to pay it off can they accept that and I’m willing to pay off the rest weekly would that work for getting my car back or do I have to pay the whole balance before getting my car back.

    • http://GetOutOfDebt.org Steve Rhode

      You will need to negotiate this with your lender.

  • Ewest305

    I had a repossession with re-instatement. I was without a car for several weeks before then. When I went to get my stuff from the towing company, the woman handed me the wrong items (someone else’s belongings). I told her and she said I would have to come back another day, that there is no one there to find my stuff. So I come back and they pull this fast one on me: that I don’t have a right to my stuff after so many days. I had close to 900 dollars worth of cd’s. I reminded them of the fact that I was present before the deadline and they just kept repeating the same line. I tried to make a claim with the creditor but they ignored it, essentially playing the same game. Why can they do this people? Do I have any grounds for a lawsuit?

  • Lidia

    When I made my last auto payment to a Texas lender, I was then informed by the bank teller that the lender will not release the car title because I owe $255 in collection fees dated back to 2005 and 2007.  This is 2012 and I’m just being notified about this??!!! I didn’t even know what the fees was for!  The lender said tjey notified me about these fees one week prior to my last payment.  The mail was returned because I had moved.  I WAS LIVID!  They waited until I make my final payment to tell me about some late fees from 5 to 6 years ago??!!!! Can they repossess my car? What is the statue of limitations in Texas to collect a debt?  It’s been two months and I refuse to pay these fees, yet they keep calling me.  I’m aware that it could be charged off on my credit, but my credit score is 760, so I ain’t worried about one blemish.  It certainly won’t drop by score that low to prevent me from getting future credit.

  • BerryhillleslI

    I had my car repossed. They (Fireside bank) sold it for only 2000.00 im assuming because they garnished my wages for 7000.00. I made payment arrangements what i could pay each month this stopped so I thought they were good with what they garnished. Now they are garnishing my husbands wages and I want to know what if any rights I have? We have had four bad years with foreclosure, garnishments and i feel like we have no other choice than to file bankruptcy and we really don’t want to do this.

  • Pauldbean

    can i sue for them lying or for harassment

    • http://GetOutOfDebt.org Steve Rhode

      It’s America. You can sue anyone, for anything, at anytime. The question is, do you have a case. You’ll have to check with a local attorney that is licensed in your state to know more about that.

  • Pauldbean

    can your car get repo for one late payment or for repeated payed late under 30 days my lender is try or lying to me about that being possible

  • Bballchick460

    My exhusband and I bought a car and he put it in his name but we used my car as collateral. But his car just got repossesed is there anything I can do to keep my car or get both if I can make the payments?

    • http://GetOutOfDebt.org Steve Rhode

      Call the lender that repossessed his car immediately and bring the past due balance plus repossession fees current and/or negotiate a solution with them. Otherwise, talk to a local bankruptcy attorney immediately.

  • Barb

    My car was repossessed and I was given a payoff amt.  They would not re-instate my loan due to being unemployed.  I decided to borrow the amt from a family member and I then sent them the payoff amt via Western Union.  Picked up car and paid them their fees and they released the car to me after they were given permission to release the car.  After almost 2 weeks, car company called and they did not give me the correct payoff amt…forgot to include repossession fee.  They claim it was not posted to my account even though I called and was told (by machine) that I had a balance of approx $277.  Can they come back and demand the additional funds?  They gave me the payoff number knowing that the car had been repossessed, so they made the mistake.  He claims I am not complying with my contract.  They gave permission to the repo company to release the car to me.  Do I have any recourse here?

  • Sierrabear03

    I had a car repo’d back in 2001 and I just now get a letter from an attorneys office for repayment. Can they do this? It has been over 11 years and it is now off my credit as of 5 years ago almost…….

  • Dloove75

    My problem is not REPO, my problem are all the threats the comapny leavs on messages or send in writing for $95.00 dollars and 3 days late. i told them i can only pay of Tuesdays bc/ i lost my job and i am collecting unemployment, noy only that when i go the car under warranty they did not want to fix the exhaust and the Ac blower they gave me a lame excused and i had to pay 300 out of my pocket. Everytime, i mention this i get their speech. Right now the cars transmission is gone, i have 3 months left to pay it off, I asked if they can meet mme half way since they still owe me from the $300 that came out of my pocket. Answer was no. what should i do. i have no money to fix it but i have to pay for something that is not working. i also found out the suv was in a wreck before i bought it.

  • John

    If I live in another state from where my vehicle was repossessed 4 years ago can I be sued in the state I live. Or is it the state the vehicle was repossessed. They never told me it was going to be sold at auction. I don’t have anything on my credit report saying repossession.

    Thank you

  • Flutterflymom

    I took my car to the lender dure it doesnt run and told them i couldnt afford a 4000.00 motor i am on disablity .I just had a 2000.00 tansmission put in it and refinaced the loan with collateral from my house like tvs and such can they take this>? even if i am on disablity .or can i just say they are broke and threw them out how can i avoid taking my things?

  • Kalari26267

    I had my vehicles repossessed through a Credit Union in AZ. I was current on one and behind 2 payments on the other. I have been late before and they were fine with it and then they decided they weren’t fine with it and wouldn’t work with me. Told them to go ahead then and repossess the one and they said that I would end up having the other repossessed as well due to some thing CU’s can do in their contracts about other accounts through them OR they could attach the balance from the one vehicle that was going to be repossessed onto our other vehicle. I did have them both repossessed a few months later.

    I then received a letter saying they were sold and I owe a substantial amount on them both still. a deficiency on both of them. I never received a letter saying when and where they were to be sold, how much for, etc. For all I know they could have just kept them and stated they were sold and charging me almost 10,000 still on both of them each.

    Now it has been 7 months and have had no contact with them. My question is do they have to go to court and get a judgement against me to take my tax return this year or could they just take it if they want too?

  • Kalari26267

    I had my vehicles repossessed through a Credit Union in AZ. I was current on one and behind 2 payments on the other. I have been late before and they were fine with it and then they decided they weren’t fine with it and wouldn’t work with me. Told them to go ahead then and repossess the one and they said that I would end up having the other repossessed as well due to some thing CU’s can do in their contracts about other accounts through them OR they could attach the balance from the one vehicle that was going to be repossessed onto our other vehicle. I did have them both repossessed a few months later.

    I then received a letter saying they were sold and I owe a substantial amount on them both still. a deficiency on both of them. I never received a letter saying when and where they were to be sold, how much for, etc. For all I know they could have just kept them and stated they were sold and charging me almost 10,000 still on both of them each.

    Now it has been 7 months and have had no contact with them. My question is do they have to go to court and get a judgement against me to take my tax return this year or could they just take it if they want too?

  • LaDarius

    The used car dealer that I bought my car from repossessed my car and kept the tires and rims on it that I purchased and won’t give them back and take back his original tires and rims that came with it. Also, the car is already back on his lot for sale. The balance I owed is $2500. He has a $4950 price on the windshield. Can he sell the car for that much and keep everything or am I owed something?

    • LaDarius

      The used car dealer that I bought my car from repossessed my car and kept the tires and rims on it that I purchased and won’t give them back and take back his original tires and rims that came with it. Also, the car is already back on his lot for sale. The balance I owed is $2500. He has a $4950 price on the windshield. Can he sell the car for that much and keep everything or am I owed something? Oh, yeah. I am in North Carolina.

  • LaDarius

    The used car dealer that I bought my car from repossessed my car and kept the tires and rims on it that I purchased and won’t give them back and take back his original tires and rims that came with it. Also, the car is already back on his lot for sale. The balance I owed is $2500. He has a $4950 price on the windshield. Can he sell the car for that much and keep everything or am I owed something?

  • Yjoinme

    Hi.. My truck was repoed for no insurance and i made arrangements with the lot to provide proof of insurance and make my next payment. After i complied with the agreement and made a payment, the owner of the dealership refused to release the truck to me. Also several personal items were missing and they ordered me off of the lot with no explanations. I have the receipts of both the payment and the insurance that was faxed to them. Isn’t that illegal for them to take a payment and not give me my truck back? Mind you…I’ve Never,never been late or missed a payment!

  • rosie

    I’m not behind but rather late on my payments. The Customer Service rep says that if I’m late again they will collect the car. No Right to Cure notice has been sent, and when I told her that she cannot take possession of the vehicle until she sends a right to cure and waits the time the law allows. The Customer Service rep says that they sometimes send a letter, but most times it’s verbal and it’s “we’re coming to take your car”. The Bank is Crescent Bank & Trust in LA. There are pages upon pages of complaints on this company. Do they have the right to come and take the car if I’m days late not months?

    • Dayshacallaway

      Thats what im trying to figure out i was in my ten day grace period.

    • Dayshacallaway

      Thats what im trying to figure out i was in my ten day grace period.

  • Concerned

    I surrendered by vehicl because I could not afford the payments, they auctioned it, and now say I owe the difference.  Is there anything I can do

  • pete

    if i claim the the car back should i be concerned that they destroyed the car getting it on the flat bed

  • pete

    if i claim the the car back should i be concerned that they destroyed the car getting it on the flat bed

  • Repdc1999

    My vehicle was repossessed back in 2006. I have not made any payments toward the balance because they told me the amount i agreed to would not even pay down the principle. I can’t afford a payment even now because i do not make enough money. The amount they trying to claim is around $11,000 (Originally it was around $6,000). What should i do about this?

  • Repdc1999

    My vehicle was repossessed back in 2006. I have not made any payments toward the balance because they told me the amount i agreed to would not even pay down the principle. I can’t afford a payment even now because i do not make enough money. The amount they trying to claim is around $11,000 (Originally it was around $6,000). What should i do about this?

  • Steve Rhode

    I’d find a local attorney to help. You seem to have a good argument.

  • Southernlady0166

    I live in Colorado which has under UCC law debtor must be sent a Right To Cure letter if debtor falls behind on car payments, giving them 20 days to bring payments current. I had never even been 1 month late. However in April I did fall almost 3 weeks late, informed them last Tues pymt was mailed, on Thur my vehicle was repo’d, they received the payment on Friday – however I was never even sent that Right To Cure letter. (This is a finance company – something the dcealer didn’t disclose to me at time of sale) – Since RTC letter was never sent wouldn’t this make the repo illegal and since they had received the pymt that Fri and no payment is even due now, wouldn’t they have to return the vehicle??

  • Southernlady0166

    I live in Colorado which has under UCC law debtor must be sent a Right To Cure letter if debtor falls behind on car payments, giving them 20 days to bring payments current. I had never even been 1 month late. However in April I did fall almost 3 weeks late, informed them last Tues pymt was mailed, on Thur my vehicle was repo’d, they received the payment on Friday – however I was never even sent that Right To Cure letter. (This is a finance company – something the dcealer didn’t disclose to me at time of sale) – Since RTC letter was never sent wouldn’t this make the repo illegal and since they had received the pymt that Fri and no payment is even due now, wouldn’t they have to return the vehicle??

    • http://GetOutOfDebt.org Steve Rhode

      I’d find a local attorney to help. You seem to have a good argument.

    • Cassh626

      This just happened to me also. My car was repossessed today and I have proof that I was never late on any payment for over two years. I am going to talk to an attorney and see what legal action I can take. I am absolutely livid right now!!

      • http://GetOutOfDebt.org Steve Rhode

        I would be also!

  • Robert

    Thank you for sharing this valuable information about your rights before, during and after repossession. Very good and useful tips. 5*
    credit with bad credit

  • Steve Rhode

    The first thing is to send a certified letter, return receipt requested, to the bank documenting your deployment status. Next, kick your family in the butt and get them to contact the bank and make arrangements to begin payments right away.

  • Christal Cooper

    im in the military and im on deployment and appearantly my family was not making payments on my car and the dealer ship bout the car back from the bank and is now trying to repo the car what should i do

  • Christal Cooper

    im in the military and im on deployment and appearantly my family was not making payments on my car and the dealer ship bout the car back from the bank and is now trying to repo the car what should i do

    • http://GetOutOfDebt.org Steve Rhode

      The first thing is to send a certified letter, return receipt requested, to the bank documenting your deployment status. Next, kick your family in the butt and get them to contact the bank and make arrangements to begin payments right away.

  • Steve Rhode

    I don’t know what your contract said. Why not just pay the tax?

  • Tamikawatson28

    I paid $3000 dollars for my car and have not paid the $265 tax balance thats due, do that give the salesman a right to repo car, being that we are not under a security agreement?

  • Tamikawatson28

    I paid $3000 dollars for my car and have not paid the $265 tax balance thats due, do that give the salesman a right to repo car, being that we are not under a security agreement?

    • http://GetOutOfDebt.org Steve Rhode

      I don’t know what your contract said. Why not just pay the tax?

  • Mona

    Hi, I’m in the same situation. Are you able to make payments on the difference that you owe?

  • Steve Rhode

    That’s the way it works. They sell you car at auction and then bill you for the difference between the sale price and the balance owed.

    You may want to speak to a bankruptcy attorney.

  • L3iduh_1985

    We just recently got our vehicle repossessed. We couldn’t afford the monthly $470 payment any longer so we did a voluntary repo. Now the repo collection agent is asking us to pay the full $9000 balance on the car. But we do not have that money and cannot afford to pay it in full. If we had that money otherwise, why would we even have the car repossessed in the first place?! Now, is there any way or law that says we can make payment arrangement instead that would fit our paycheck to paycheck income? Thanks!

  • L3iduh_1985

    We just recently got our vehicle repossessed. We couldn’t afford the monthly $470 payment any longer so we did a voluntary repo. Now the repo collection agent is asking us to pay the full $9000 balance on the car. But we do not have that money and cannot afford to pay it in full. If we had that money otherwise, why would we even have the car repossessed in the first place?! Now, is there any way or law that says we can make payment arrangement instead that would fit our paycheck to paycheck income? Thanks!

    • http://GetOutOfDebt.org Steve Rhode

      That’s the way it works. They sell you car at auction and then bill you for the difference between the sale price and the balance owed.

      You may want to speak to a bankruptcy attorney.

    • Mona

      Hi, I’m in the same situation. Are you able to make payments on the difference that you owe?

  • Steve Rhode

    They won’t take your income tax but they will probably go after you for the balance due as the co-signer.

  • Manda915

    If I co-signed for a car loan and they let the car get repo will they take my income tax?

  • Manda915

    If I co-signed for a car loan and they let the car get repo will they take my income tax?

    • http://GetOutOfDebt.org Steve Rhode

      They won’t take your income tax but they will probably go after you for the balance due as the co-signer.

  • Joshua Gabert

    The credit Union is goign through my dealer ship. Im not sure how all these hidden fees and things work. This is my first Repo. But that would make sense not to have any fees from my dealership if I was going through a Credit Union?

  • Joshua McEntarfer

    Yes. That is my exact predicament. Unless I pay the Towing Fee. I can not get my Items. Is this legal?

  • Steve Rhode

    Okay, so it is not a fee for access to the items but it is a towing fee that is currently owed. Is that right?

    So the position is that unless you have paid the pre-existing fee, then you don’t have free access to the contents. If you paid the fee then you would be able to get the items because your fees would all be paid to whoever has the vehicle right now. Is that right?

  • Merovingian TV

    I assume these laws & policies are irrelevant if it’s a Credit Union Auto Loan?

  • http://twitter.com/MerovingianTV Merovingian TV

    I assume these laws & policies are irrelevant if it’s a Credit Union Auto Loan?

    • Joshua Gabert

      The credit Union is goign through my dealer ship. Im not sure how all these hidden fees and things work. This is my first Repo. But that would make sense not to have any fees from my dealership if I was going through a Credit Union?

  • Joshua Mcentarfer

    “Secured Items” in the contract stipulate “….any item within physical connection to said vehicle. Any attchement to vehicle that cannot be simply removed without usage of any mechanical tool or device…” Such as a car stereo, amp, rims, tires, gauges, head lights etc. in other words I understand that “Secured Items” are exactly as it states. Secured to the vehicle. I called my car dealership and asked for clearification on “Secured Items” and what I quoted you is what he told me. So my confusion is rising. lol…however even if I can find a way just to get my sons things that I need, Diaper bag, Stroller, Car seat, and records. I can leave all the rest. They are just material things that can be replaced. But my dealership is telling me that I have no authority to any of my belongings unless I pay this $125.00 for towing fees. My contract clearly states I have legal and fee less access to my belongings. I feel like im being pushed around. What step shoul I take?

  • Steve Rhode

    How does the agreement define “Secured Items?” Are those items which are now under their security or in the secured vehicle? It seems like there is more to that term.

  • Joshua Gabert

    Right. However my terms state that they can claim the service fee for “Secured Items”. The property i am requesting is “Un Secured”. Such as my mp3, car seat, stroller, flu shot and hep shot records for my son and his diaper bag. These are major items that I need. Im not asking for my stero or such things that are Secured with the vehicle.

  • Steve Rhode

    You’d have to check with the terms of the sales contract and/or an attorney in Idaho. On the surface though it sounds like a service fee.

  • Joshua McEntarfer

    Yes. However, you must fill out an IT (321-85) form and follow process to have have your credit report reflect changes. It is a simple process to be done at your local court house. This usually will vary, depending on your state, 15.00/75.00.

  • Joshua Gabert

    I recently had my Car repossesed. The company that took my car is now trying to charge me 125 dollars to collect my un secured property. Is this Legal? I live in IDAHO

  • Joshua Gabert

    I recently had my Car repossesed. The company that took my car is now trying to charge me 125 dollars to collect my un secured property. Is this Legal? I live in IDAHO

    • http://GetOutOfDebt.org Steve Rhode

      You’d have to check with the terms of the sales contract and/or an attorney in Idaho. On the surface though it sounds like a service fee.

      • Joshua Gabert

        Right. However my terms state that they can claim the service fee for “Secured Items”. The property i am requesting is “Un Secured”. Such as my mp3, car seat, stroller, flu shot and hep shot records for my son and his diaper bag. These are major items that I need. Im not asking for my stero or such things that are Secured with the vehicle.

      • http://GetOutOfDebt.org Steve Rhode

        How does the agreement define “Secured Items?” Are those items which are now under their security or in the secured vehicle? It seems like there is more to that term.

      • Joshua Mcentarfer

        “Secured Items” in the contract stipulate “….any item within physical connection to said vehicle. Any attchement to vehicle that cannot be simply removed without usage of any mechanical tool or device…” Such as a car stereo, amp, rims, tires, gauges, head lights etc. in other words I understand that “Secured Items” are exactly as it states. Secured to the vehicle. I called my car dealership and asked for clearification on “Secured Items” and what I quoted you is what he told me. So my confusion is rising. lol…however even if I can find a way just to get my sons things that I need, Diaper bag, Stroller, Car seat, and records. I can leave all the rest. They are just material things that can be replaced. But my dealership is telling me that I have no authority to any of my belongings unless I pay this $125.00 for towing fees. My contract clearly states I have legal and fee less access to my belongings. I feel like im being pushed around. What step shoul I take?

      • http://GetOutOfDebt.org Steve Rhode

        Okay, so it is not a fee for access to the items but it is a towing fee that is currently owed. Is that right?

        So the position is that unless you have paid the pre-existing fee, then you don’t have free access to the contents. If you paid the fee then you would be able to get the items because your fees would all be paid to whoever has the vehicle right now. Is that right?

      • Joshua McEntarfer

        Yes. That is my exact predicament. Unless I pay the Towing Fee. I can not get my Items. Is this legal?

  • Art

    my creditor repo my vehicle and paid it off the next day.
    My credit report shows a notation reading:Repossession redeemed.
    Can the creditor change that repo notation, or eliminate it?

  • Art

    my creditor repo my vehicle and paid it off the next day.
    My credit report shows a notation reading:Repossession redeemed.
    Can the creditor change that repo notation, or eliminate it?

    • Joshua McEntarfer

      Yes. However, you must fill out an IT (321-85) form and follow process to have have your credit report reflect changes. It is a simple process to be done at your local court house. This usually will vary, depending on your state, 15.00/75.00.

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