Know Your Rights: A Quick Session on Wrongful Car Repossession
When you drive off the lot with your newly leased or financed car, you’re likely glowing with the thrill of ownership when “pride in possession” might be a more apt description. You don’t own the car yet, and you technically won’t until you pay off the loan in full. Until then, there’s always a risk that you might fall behind and be visited by the dreaded “repo” (wo)man.
Repossession is a creditor relief action that allows them to seize or take back property that has been used as collateral or not paid off as per the financing agreement. They don’t even need to get a court order first to do so. However, that doesn’t mean that they can arbitrarily go to your home and seize your unpaid vehicle by force. Auto repossession is strictly regulated in the U.S., but some creditors will cross legal boundaries to accomplish their goals. Therefore, it is imperative that you know your rights.
Providing a Notice of Default
When your car payments go into arrears and the lender is considering a repossession action, they’re legally required to send you a notice of default that advises you of your right to pay the outstanding amount and avoid repossession. The creditor doesn’t have to tell you when they actually seize the vehicle, but you have the right to take reasonable steps to address the default first.
Wrongful Repossession Actions
If you fail to catch up on the missed payments, your lender may repossess the vehicle, but the law strictly regulates how they may go about doing so.
- Breaking In: Repossession agents are not permitted to legally break into private property to seize a car. They can’t break a window, pick a lock, or even open the door to your garage.
- Breaching the Peace: Another illegal repossession action is breaching the peace. Agents may not verbally or physically threaten you to get access to or seize a vehicle. If they do, you can call the police immediately.
Providing a Repossession Notice
After the car is taken, the creditor is legally required to send you a repossession notice to advise you that they have reclaimed the vehicle and intend to sell it. If they fail to provide you with this notice prior to selling it, they’re breaking the law. After the sale, you are entitled to receive a Notice of Sale and Explanation of Deficiency, which informs you that the vehicle has been sold, and why.
If you believe that you have been subjected to an illegal or wrongful repossession of your vehicle, call MaxwellDunn today to discuss your situation. Being overdue on your car payments doesn’t give your creditor the right to seize the vehicle without regard for the law. Let us protect your rights.