Car Repossession Laws
Understanding car repossession laws is important for anyone who has fallen behind on automobile payments and is in danger of losing the vehicle. Whenever a vehicle is purchased using some type of automobile loan, a borrower is entering into a contract with the lender. As long as the borrower is making regular monthly payments, and those payments are on time, there should be no problem. However, failing to keep up with these payments may result in the loss of the vehicle. The automobile itself serves as security for the loan. This means that the lender has every right to take possession a vehicle if the borrower is not living up to their promise to pay back the loan. Moving forward with the seizure of an automobile can frequently be done without a lender needing to go through the courts or even let a borrower know ahead of time that the car will be repossessed. That is not to say that there are not some limitations on what a creditor can do in these cases. Such limitations will vary from state to state. For this reason, a debtor should make sure that they understand how car repossession laws are applied in their state. Some good sources of this information may include a state consumer protection agency or even a privately hired attorney.
In addition to understanding car repossession laws, there may be other steps that a debtor can take when an automobile is in danger of being seized. If the borrower is still in possession of the vehicle, but is behind on monthly payments, they should contact the lender right away. It may be that the loan company will be willing to work out some kind of new payment plan, if for no other reason than to avoid the hassle and paperwork involved in taking possession of the automobile. An entirely new loan may be able to be negotiated. Or, a consumer may be able to sell the car themselves and use the proceeds to pay off the outstanding loan. If a vehicle has already been seized, it is important to take quick action. By making full financial restitution on any money that is owed, a borrower can generally get the vehicle back. There will also usually be additional fees that are charged for the storage and repossession of the vehicle. A debtor will also need to show proof of insurance and a valid driver's license. However, car repossession laws will also give the lender certain rights in these proceedings. Should it be discovered that a debtor has hidden the vehicle to avoid having it seized or vandalized or deliberately damaged the automobile in any way, the loan company has every right to refuse to return the vehicle. The same applies if the borrower has used the vehicle to commit a crime. If any lies on the part of the borrower are discovered on the credit application, this is also grounds for refusal to return the vehicle.
There are also several rights that are granted to lenders under car repossession laws. If an automobile has been seized two times within the past year, a finance company can refuse to return a repossessed car regardless of what a borrower may offer to do. When a borrower has experienced three repossessions on the same vehicle, the lender is also under no obligation to return the automobile. At a certain point, a defaulting debtor will need to face the fact that the vehicle is gone for good and there is nothing that can be done. In most cases, a debtor will not know that their vehicle is about to be seized. There may be personal property that was inside the car when it was repossessed. The company that seized the car is legally obligated to send the debtor a list of items that were in the vehicle at the time that it was seized. In addition, information on how to claim this property will be included in this communication. According to car repossession laws, a debtor has 60 days to pick up the items. If they fail to do so, the company that seized the automobile may dispose of the items in any way they choose.
In most cases, car repossession laws allow an automobile to be repossessed at any time of the night or day. Representatives of the repossession company are permitted under the law to come on to private property for the purpose of seizing the vehicle. However, physical force, or even the threat of it, is not permitted. Removing the automobile from a closed garage may constitute a "breach of the peace" on the part of the seizing agency. The legal definition of the term "breach of peace" may vary from state to state. The Bible explains that the words of the righteous are important to God. "The thoughts of the wicked are an abomination to the Lord: but the words of the pure are pleasant words." (Proverbs 15:26)
A lender may also resell the automobile in an attempt to recover the defaulted debt. Under car repossession laws, a lender must notify the debtor that the car will be sold at least 15 days prior to the actual sale. This document is called a "notice of intent to sell vehicle." The borrower will also be told exactly how much money they will have to pay in order to get the vehicle back. When a lender is requiring payment in full from the defaulting borrower, they must explain why this is the case. Should the debtor still owe the lender money after the car is sold, this information must be disclosed at this time.