As anyone who has owned an automobile knows, it can be expensive to own a car. Some costs include maintenance, gasoline, paying for any unexpected repairs, and monthly payments if you finance the costs. Sometimes, however, there might be times when you are unable to make a payment. A creditor has a couple options in this situation, one of which is repossession of the vehicle. Fortunately, remedies available to creditors are regulated by law.
The Repossession
While there are several steps to the repossession process, it cannot start until a person has gone into default. There is no statutory time limit that determines when a person goes into default. Instead, the default time limits will be outlined in the loan documents. Once that period of time has passed, however, the creditor will be within his rights to take action outside of the court system and repossess the vehicle.
Breach of the Peace
Once a creditor has decided to repossess the vehicle, he may proceed to do so without notice, and at any hour of the day. In fact, if you are in default, a creditor may even go onto your property in order to retrieve the vehicle.
One thing a creditor cannot do during repossession, however, is to commit a “breach of the peace.” While the law may vary from state to state, a “breach of the peace” generally includes such activity as:
-use of threats
-use of physical force
-causing excessively loud noise
-repossessing in spite of consumer objections
-entering into the home or a closed garage without consent
-breaking locks or chains to gain access to the vehicle
Personal Property
Since repossession can happen at any time and without notice, it is likely that any personal property you leave in the car will be taken along with the vehicle. Fortunately, creditors are prohibited from keeping or selling any personal property found within the vehicle, and in some states, must tell you what was found in the vehicle, and where you can retrieve the items.
Sale of the Vehicle
Once the creditor has obtained the vehicle, he will then have the choice of keeping the vehicle to compensate the debt, or selling it in a public or private sale. If he chooses to sell off the vehicle, you will have an opportunity to “redeem” the vehicle, by paying the full amount you owe to the creditor, which includes expenses connected with the repossession.
Some states even contain provisions allowing you to reinstate the loan by re-paying the deficient amount and covering expenses related to the repossession. In these circumstances, you would still need to continue regular monthly payments in order to retain possession of the vehicle.
Deficiency
Things do not end once the creditor sells the vehicle, however. If the sale of the vehicle provided insufficient funds to cover the debt owed, then there would be a “deficiency.” The creditor would then be within his rights to bring an action against you in court to recover that deficiency amount. Similarly, if the sale provided more than enough money to cover the amount you owed, you would be able to claim the excess amount.
Contact an Attorney
The law regulating car financing and repossession is complex and can prove to be stressful if you don’t have adequate representation. If you are looking for a dedicated attorney that will help you navigate the legal system in order to protect your rights, then contact the Bromberg Law Office, P.C. to make an appointment today.