If your car is repossessed, you will probably find that you have a lot to deal with all at once. First and foremost, you'll have no car, so you'll have to figure out how you can get around. This may bring you to the second question: How can you get your vehicle back?
Or, if you don't want your car back, will you still owe money on a vehicle that you're no longer driving? If so, how are you going to come up with the cash? Repossession can create a very stressful situation. But in the middle of all the chaos, you have to remember that you still have legal rights.
So, if at all possible, you should contact a lawyer to help you with the details. At the very least, you should be aware of your options.
What Can and Cannot Happen when a Car is Repossessed
Most states allow lenders to seize vehicles without giving prior notice. This is why you hear about people who step out of their homes or places of employment and find that their car just isn't there.
If you discover that your vehicle has been taken due to nonpayment or lack of insurance coverage, you should make notes about the details of the event. Lenders and repo companies must adhere to certain rules. And if you find that your rights have been violated in any way, you are entitled to seek legal recourse.
Items Inside Your Car are Still Your Property
If you have personal items inside the car when it is repossessed, these things may not be kept by the lender or repo agency. In many states, the lender is required to provide you with a list of any items found in a repo'd vehicle. Even if they don't, you can ask about your private property and inquire about how you can get it back.
Your Property may not be Damaged During Repossession
If the car is locked up in your garage, the repo people are not permitted to break the door down to get to the vehicle. This would be considered a "breach of the peace." If the peace is breached during a repo, you may be able to sue for damages. Or, you can use the violation to support your defense if the lender sues you for a deficiency balance.
You may Not be Verbally Abused or Physically Assaulted during a Repo
Again, this type of aggression is considered a breach of the peace. So, if you are threatened or harmed when the car is taken, be sure to preserve evidence of the attack. If you have your phone on you, this should be pretty easy. Also, if you incur an injury, you'll need to see a doctor in order to document the incident.
Consumer Rights after a Car is Repossessed
Once your car is repossessed, the lender will most likely sell it at auction. However, they are required to tell you when and where the sale will take place. Of course, if you want to get the car back, you should contact the lender well before receiving an auction notice. This way, you may actually have time to arrange vehicle redemption or loan reinstatement. Even if you're planning to let the car go, you will need time to file for bankruptcy or at least prepare for what happens after the vehicle is sold.
Even though the lender is required to sell the car in a "commercially reasonable manner," the profits from the sale may not cover your loan balance. And if they don't, you will probably have to pay the difference, or the "deficiency balance." If you don't pay, the lender can bring legal action against you.
Declaring bankruptcy should provide you with protection against a deficiency balance lawsuit. If you are brought to court, you may be able to get out of paying the lender if any of the following things apply:
- The lender or repo agency somehow breached the peace while taking the car.
- The vehicle was not sold in a commercially responsible manner. Basically, this means that the lender sold the car at a very cheap price.
- The lender waited too long to sue you, and the statute of limitations has run out.
Again, if you have any questions about your rights before, during or after repossession, it's best to consult a lawyer.
Auto Financing Assistance after Repossession
If your credit has been damaged for any reason, getting financed to buy a car can be more difficult. But Auto Credit Express can help. Even if you have bad credit, we can match you with a local dealership that's connected to special finance lenders.
There's no charge for the service we provide, and contacting us places you under no obligation to buy anything. So, go ahead and fill out our simple and secure auto loan request to get started today.