Repossession

Any time you borrow money to buy a car, you should know that:

• The lender can repossess if you miss a payment or for any default (a violation of the contract).

• The lender can repossess without advance notice.

• After car repossession, the lender might be able to accelerate, meaning the lender can require the borrower to pay off the entire balance of the loan in order for the borrower to get the vehicle back.

• The lender can sell the repossessed vehicle at auction.

• The lender might be able to sue the borrower for the deficiency if it sells the car for less than the borrower owes. This is true even in voluntary car repossessions.

• The lender cannot commit a "breach of the peace," for example, breaking into a home or physically threatening someone, in the course of a car repossession.

The bottom line is if you want to know your rights, they are listed on your security agreement. This document you had to sign when you got a car loan. This is the document that the lien holder gives to the DMV to place a lien on your car. It will go over what the lien holders rights are in the event of default, and what your rights are. So find the documents you signed when you got the loan, or ask the lien holder for a copy and read it, it is the most important document you sign when you get a car loan.

If you know you're going to be late with a payment, talk to the lender to try to work things out. If the lender agrees to a delay or to modify the contract, be sure you get the agreement in writing.

Some states have laws that give consumers additional rights. Contact your state or local consumer protection office for more information.

Points made by other contributors

• READ THE CONTRACT. Lenders go to a lot of trouble to make sure their contracts and other paperwork are LEGAL so you can't get out of a loan because the paperwork wasn't right. They may not tell you all your rights, but they will tell you ALL of theirs.

• Decide what you can afford to pay and have a bit of room to live. Then make them the offer. Think about it BEFORE you talk to them and make up your mind that you are willing to pay that much each (week, month, year). When you talk to the creditor don't cave in to the pressure they put on you to pay up. They can ultimately garnish your wages but why should they if you will pay them the money without it. By the way, they can't put you in jail.

• Call the lender and make them an offer to settle now. They would rather have money now than have to go through the collections, judgment, garnishment etc. routine. All you can waste is time and a phone call. They probably have an 888# so you won't even be out a phone call.

• The worst part I see is the ability to give you and the IRS a form 1099 for whatever they DONT collect from you. It basically says the lender forgave you X number of dollars, so that forgiven money is treated as INCOME to YOU. Example; you owe $10K on a car, it disappears, lender can't collect. Two years (or whenever) the lender sends you a 1099. You have moved six times since the last address the lender had for you so it gets returned. You never receive it. BUT the IRS gets their copy and bills you for $10K in unreported income and penalties. You were expecting a huge refund that year and the IRS gets it. NOT fun.

I lost a large repo account for accidentally calling a debtor's father at 200am one time. Law says you can approach at any reasonable time usually aften 1000pm I quit. UNLESS, there are lights on, folks moving around, they are out in yard etc. Knocking the door after being told "debtor doesn't live here" is not cool. telling anyone but the debtor about their personal info is not cool. Okay, now where did he get your car from? Surely NOT your parents home? Or did they tell him where you were?

Unfortunately, People get behind and cars get repo'ed. I myself repo vehicles. I know you probably all hate me for that but I have also had a vehicle repo'ed in the past. We all have times in life when things just suck but If I may give you'll some advice. 1) Don't ever perchase a vehicle for a family member, they really don't care about your credit, they didn't care about their own or they would have probably got the loan themselves. 2)If a repo person calls you to find out where you are, they will probably have your vehicle with 24 hours. So, if they say call your lender to try and stop it, I would call. There's always hope to call if off. The banks loose money when a car is repo'ed. 3)Even if you think you have tried everything, call a local bank or your bank and try to get it refianced with someone eles. There's always someone out there willing to lend money. Gook luck to all of you, hope I don't have to repo your car.

I just read the following answer by anonymous to the question concerning your rights in a repossession:

"I am a repo man, and ironicly this happend on a case last week. The debtor (you in this case) filed for bankruptcy at 8:00am. I repoed his car at 7:30pm that night. After a few days on the phone with his laywer, and bank, the car was returned at the descretion of the bank. So, if you file before your car is repo'd, you can keep the car for that period of time. Your report will show what the bank wants to say, call them about it. Once your car is repo'd that's it, bankruptcy cannot help."

Anonymous is mistaken -

Even after a car has been repossessed, if the person whose car was repossessed then files bankruptcy after the car has been repossessed, and if they file for bankruptcy after the car was repossessed but BEFORE the car is then resold to another person, it is possible to compel the creditor to return the car to the debtor.

The reason for this is that the debtor can file a motion asking the car to be returned to the debtor because by repossessing the car right before the bankruptcy, the repossessing creditor is placing itself in a better position than other creditors (it is called a "preference"), and the court on that basis can order the car to be returned.

Breach of the Peace: Taking the vehicle from driveways, open carports, and parking lots at work is generally allowed. But the repossession company may not:

• enter a closed or locked garage, or otherwise break and enter any property
• enter into your house, unless invited
• damage the vehicle during the repossession
• threaten or commit violence, or touch anyone
• threaten you with arrest
• force you to pull over to the side of the road
• have sheriffs or police present unless the creditor has already sued you

True to all of the above and including:

• If you tell them to get off your property, they MUST do so.

• Cannot block or disable the vehicle.

• Cannot misrepresent themselves. Giving another name or state another occupation is illegal.

• If you decide to surrender the vehicle, you are allowed to obtain all personal items from the vehicle and to remove the tags. The tags are registered to the owner, and the owner is responsible for them. Also, remove the registration and insurance cards.

• If the repo man fails to abide to any of the above,(including the above post) call the police and have them arrested. The rights are with the property owner, and any violation including "Breach of Peace" will NOT be tolerated by any law enforcement officer!
• Read the terms of your loan thoroughly before you sign. It's a lot of boring fine print, but it's important. I was surprised to find my contract included my permission to let the bank onto my property to take my car should I default! So I had basically signed away my right to refuse to let the repo man into my closed garage!
• I was a police officer in Milwaukee for a number of years. I retired in 1984. So, my answer may be dated. When people called us to say that their garage was broken open and their vehicle was stolen, we told them that it was a civil matter and to talk to the district attorney if they wanted. We always received a phone call after the repo men had left, so we knew what happened to their vehicle and why. When we informed them that their vehicle was repo'd by the loan company, they usually just hung up. I was never called to settle a dispute if the repo people were confronted because that never happened in my 25 years. The repo people are good at their job and we never had a confrontation.
• Please check out these Ohio Statutes:

Regarding Ohio not having a breach of the peace law, your repo man is mistaken.

Please see below-these are Ohio Laws verbatim-

Section B-2 - Would indicate that there is codified in Ohio a breach of the peace statute.

1309.609. (UCC 9-609) Secured party's right to take possession after default. (A) After default, a secured party: (1) May take possession of the collateral; and (2) Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under section 1309.610 of the Revised Code.

(B) A secured party may act under division (A) of this section: (1) Pursuant to judicial process; or (2) Without judicial process if it acts without breach of the peace.

Also whoever said that the repo man -) Cannot block or disable the vehicle.( Is not fully informed re Ohio law pursuant to 1309.609 (A)(2) which states that the repo man can bust up your stuff. (render equipment unusable in legal terms).

I am the sales manager & collections dept. of a small dealership in Seattle. We finance many of the cars we sell ouself (inhouse). I have done many repo's myself when they are easy(like when the car is near the dealership and we have extra keys and can just drive the car away). The people who live farther away or when the car is blocked in we use a repo company. In Washington we legally can repo a car at 1 second past midnight if a payment was due that day. We can open a gate to remove a car as long as the gate isn't locked. We cant move another car to get to the repo car. We cant open a garage and take the car, that would be breaking and entering. If the people protest we cant take the car(that's why its often done at night,so you don't see the people.

People may remove all personal belongings from a car after its been repoed, as long as they don't devalue the car. They cant take back fancy wheels they might have put on, remove the stereo or speakers, seats, etc. If they have a speaker box and amp, they may remove that.

Most repoed cars are sent to wholesale auction(dealer only) where they sell for about 30-40% of what you paid for it 1-2 years ago. If the car is resold for more than you owe(in Washington anyway), they must pay you back the difference. If you owe alot the car will be cleaned up before it goes to auction so they can get back more of what is owed, but if you do not owe very much they leave the car dirty and full of grabage to insure a low selling price so they do not have to refund you any money.

Many times these laws are taken loosely or bent to get the car back, I would guess, always having followed the law to the letter ourself. You must remember there are some people who have had 5 or more cars repossessed and know the laws and try to use it to keep their car. They do not intend to pay for a car when they buy it, they then try to hide the car, trade cars with a friend, block it in their driveway, etc. Usually we can spot these people before we let them buy a car, their only concern is the down payment, they don't care at all about the monthly payments or interest.

Many small dealerships do reposes their cars once a payment is only several days late. We generally don't sent a car in for repossession until they have not paid in 2 months and they will not return our calls or letters. If they have called to let us know they were having problems or sent in at least part of a payment we may wait a while longer but once a 3rd payment is missed the car is sent in to be picked up for sure. It is expensive, we usually spend over $300 to get a car picked up from a repo company. We would much rather keep the car sold to the person who bought it, but there comes a time when we realize we may not ever get any more money from the person and we either send them to collections, repo the car, or write it off as a loss. Typically a repoed car is very dirty, broken headlight, taillight or other damage not there we we sold it, not taken care of, full of garbage and has hardly enough gas to make it to a gas station.

Here are more opinions and answers from Wiki s users:

• You know if you have paid the payment or not. It's not the bank's job to let you know that they are going to repo the car. I made my car payment on my husband's business account, in which I am not a signer. I did this by complete mistate. The check was returned and the bank repoed my car without informing me that I had a returned check. During the repo, the landscape work done on our property was torn up. The tow truck drove over all of my plants.

• "I didn't get a repossession notice." is about as ridiculous as saying "I didn't know I had a car payment." The bank owns your car (not you) until it is paid off. If you LEND (exactly what a bank does when they give you a LOAN for a car) your neighbor your lawn mower and it's sitting in his yard the next day after he used it, don't you have the right to take it back? Same concept. If people would only READ the loan contracts they sign, then they wouldn't be so "shocked" when their car gets repossessed after they don't make the payment for 4 months.

• The bank does not own your car until it's paid off, you do. The rights you have are almost infinite. If people only knew all they had to do to stop the repo man was say "Don't take my car." Well, if only most repo men would listen. Once that is said and the car is still taken, they can be held liable in civil court. It's what is known as an "unequivocal oral protest" and most state case law will back it up. But unless you have a payment receipt from the bank, you cannot prove to the repossession agent that you have paid.

• Post-Repossession Notice: Under California law, the creditor must send you and any co-signers a special post-repossession notice. The post repossession notice tells you about your right to reinstate the loan, and must contain nine special disclosures. You should have an attorney review the post-repossession notice if you have been sued or contacted by a collection agency. If the post-repossession notice was never sent, or if it does not contain all the required legal disclosures, the creditor may not collect any money from you.

• If you succesfully hid your car from the Repo man the next step for the creditor to do is take you to court and even if you lose, the Court will give you a "Right to cure" letter stating that you have 20 days to make your car payment current. Which should give you plenty of time to catch up. But if you think there is no chance to make your car payment current, even with this delaying tactic, the best way is to negotiate or re-schedule payments with your creditor.

• By the way, if you decided to negotiate with your Creditor to make a payment arrangement or whatever necessary arrangement to avoid repossession, never negotiate with any representative that does not have any authority. He will only demand the car be returned or the payment made current. Speak, e-mail or send a letter to the Manager or Supervisor that has the Authority to negotiate or alter the loan agreement. In the meantime, hide the car from the Repo man till you decide what you want to do.

• My car was repoed because the bank told us they had combined my husband's truck payment with my car. Therefore "our payments" were one. Every payment was made under "both" names. Two months later our bank called me and said I was $800 behind, which of course I did not know, and the bank demanded the money stating that we knew our payments weren't combined yet. Therefore, my car got repoed 2 days later because I had no extra money to pay the $800. The funny thing is, every time we made our payment, we asked the woman if she was sure they were combined and we were told, "Yes they were combined". Unfortunately, you have to have a copy of the paper you signed to combine payments with "both" vehicles listed on it. Unfortunately for me, and the lesson was learned, only one vehicle was listed on that paper that my husband and I both signed to combine payments.

You may have a certain right, known as a right to cure, whereby you are given a grace period to resume the original contract (cure the default) with the finance company. In Pennsylvania, for example, your repossessed vehicle may go on auction after 15 days following notification that it will be sold at auction. To resume the original contract (curing the default), you bring all past due balances up to date including, at the finance companies discretion, any fees associated with repossessing the vehicle. Following that, they cannot sell your vehicle and must resume the terms of the contract.

However, states may have different applications of 'right to cure' so you need to do research for your home state. In Delaware, for example, the right to cure only applies when the payments are ballooned (adjustable rate). Google 'Right To Cure', 'Vehicle' and 'Repossession' and [your state] to further research. Another nice google term is [your state] AND 'consumer credit code'.

Aside from that, it's up to the institution that lent you the money. You could bring the account current and pay the repop charge and they could give you back the car, or they could tell you "we have tried working with you, sir, and you have done nothing but lie to us, so you must pay the BIF of your account, and then we will give you the car, but not 'til then!" It's all in how you handle the situation with them. If you rubbed them the wrong way, they may not be so willing to work anything out with you. You should always attempt to be honest and forthcoming with your creditors. It is the only way to work out something that will last and be in your best interest. Nobody likes the bill collectors calling them!

More Information:

• If your friend BOUGHT the car from the financial instution, then s/he should have gotten a title to the car Free and Clear of all liens. There should be NO payoff except what your friend wants from you for the car.

• My car was repossessed for default on a title loan. They only would accept the full amount, so, on the advice of this site, I contacted a bankruptcy lawyer. You have 10 days after repossession in Minnesota to file chapter 13 bankruptcy. This is what I did (on a Friday), and the car was released immediately (on Monday morning!). I was able to gather some of my other debts and roll that into it, and I will be paying a percentage of what I owe on all of the debt including the title loan. This was a great thing for me as I owe less than $5000 total debt ($1900 on car). CALL A LAWYER IMMEDIATELY if you know that you won't be able to work with the loan company and you need the car!

• Yes, you can, but it really depends on the lender.

• It depends on the lender. I had two payments past due on my car, and had just gotten enough $$$ to get current, but the car got repoed the day before the payment showed up. I called them up and the payment had cleared the bank, so it was good, but just a bit too late to stop the repo. I had to pay some towing and storage fees, but because I was now current, the lender released the car to me today. Yeah, it was a big hassle, but life goes on. Lesson learned. Pay on time, folks, and you'll never have to worry about the REPO MAN!

• In regards to the comment: Pay on time, folks, and you'll never have to worry about the REPO MAN! I agree with that but, what if all payments were timely and consistant, never late? What if the insurance is on and paid? What if the "repo man" was actually a couple of mechanics from the dealers shop that drove out in a regular car? That's what happened to me. One mechanic got out, hopped in the car and drove off with the other mechanic following him. I was so confused because I didn't know why and what I had done. I have all receipts to show payments were always made on time, even early if paydate fell on the weekend. Called police, they say there wasn't any notice or anything regarding the car and it was between me and the dealer. Keep in mind, this was NOT bank financing. I followed the contract requirements for insurance, but I changed companies three months ago. I never thought it was a problem because the new company faxed the new policy to the dealer. In those three months, I have had the oil changed with them (it's required) and go in to make my payments. They always greeted me with a smile, with no mention of any problem. Is it because I am deaf and they think I am dumb as well? My daughter called to ask why they picked up the car and they said it was due to a check I cancelled for a headlight they fixed, even though the repair was covered in warranty (is why I cancelled it). I combed the contract back and forth and the only reasons for default of contract is non-payment or no insurance on car. I seldom get angry, but I was MADDD! And I did something I hope won't get me put in jail. But an hour or two after the mechanics drove off in car, I went to the dealer/lot because my ID, checkbook, etc. was in car. When I got there, the car was just sitting there with the cars waiting for repair. I felt wronged enough to walk up to the mechanics (different ones) and say "I'm here to pick up my car...is it ready?" They said if it's parked back on the lot, the repair was done (HOW ODD!). So I walked to the car, hopped in and drove off, with them waving at me as I left. I was thinking to myself "Is this how repossession goes with the car just sitting there for anyone to take?" A while later, my daughter called the dealer to ask about the car and he informs us that we cannot get the car back without paying 250.00 repossession fee, storage fees, etc. I was shocked that they had no idea what so ever that I got that car back. So I am now waiting to see if those two mechanics come back, they haven't. So now what?

Personal Property in the Vehicle

According to the FTC:

Regardless of the method used to dispose of a repossessed car, a creditor may not keep or sell any personal property found inside. In some states, your creditor must tell you what personal items were found in your car and how you can retrieve them. Your creditor also may be required to use reasonable care to prevent anyone else from removing your property from the car. If your creditor can't account for articles left in your vehicle, you may want to speak to an attorney about your right to compensation.

Check your state laws before you assume anything. Each state has different rules and regulations. As far as California goes, all personal property in a vehicle is removed and a complete inventory is made of all personal property that is NOT attached to the vehicle. In California any repossession company can and will charge a fee to get your personal property back, so my advice to you is handle it the day your car is taken and don't take long because fees increase daily.

You will not be allowed in your vehicle, all property is taken out for you.

Advice from other contributors:

• Most repo agents will give you little or no info, but the longer they have your personal effects, the more money they will charge you for "storage". Call your local sheriffs department, and they will sometimes give you the name, address, and phone number of the repo agent who has picked up your car. You will not be allowed to remove anything attached to your car, like stereo equipment, bug deflectors, etc. Then you'll just have to wait it out at their office or lot.

• As far as auctioning it off, they normally remove your personal items and "inventory" them (also known as snooping and throwing uninteresting items in a paper sack), for which you are also charged a fee. Don't sign the inventory sheet until you are absolutely certain everything has been given to you. They will not allow you to get items out of your vehicle yourself, so make a list of what was in your truck before you go, and insist on receiving all items. Good luck!

• First off, the company was in the wrong. We cannot stop you from taking your personal items, for one simple rule, they are yours, and do not belong to the car. When we repo a car, we are there for the car, not your stuff. You should have the right to get your personal items out of the car. If your car was taken in the night without you knowing, call your bank and they do know where your car is. Sharon is correct about the stereo and such, they are physically attached to the car. As for storage, it is the car itself, not the items inside. If the car goes to auction, your stuff goes with it, and it's up to the auction company what they do with it. Your best bet is to get your stuff yourself as soon as possible.

• Please check with your state laws. in some states the repossesor is not allowed to take any personal items out of the car or the creditor will be held responsible for those items missing. for more info go to ftc.gov

• My car was repossessed over 9 years ago, so I don't know if the laws have changed, but when mine was repossessed, the tow truck company told me that I had to pay them their "fee" in order to even access the car, let alone the items. I had my leather jacket, my boyfriend's, and my friend's in my car, since I had just returned from a trip up North, and they said they had the right to keep and sell the things in it. I also had a camera, and luggage in there, as I had just gotten home from my trip.

• Most State Case Law provides that no condition may be put on the return of personal items. This means no one should make you sign any release or pay storage fees. The return of your items must be immediate upon request and unconditional. Further, most case law has held "if it's made to go on, it's made to come off." This means things you put in the vehicle, such as speakers, stereos, bed mounted tool boxes, after-market parts (including the engine compartment), etc. are personal property.

• Now, let's get down to reality. Most recovery companies would not let you remove items that are "attached to the vehicle". However, if it's financially worth it for you, they can be held liable in a civil case.

• Most state case laws are silent on the matter of personal property contained in repossessed vehicles. I have been in this business 25 years, we repossessed almost a thousand cars last month alone, so trust me on this one. The only states that I am aware of that contain statutes regarding personal property in repossessions are CA and FL, and both allow for charging for return of personal effects. Other states have seen challenges regarding the right to charge for handling of personal property, and the judges have ruled in favor of the recovery company, stating it is not reasonable to expect the recovery company to be responsible for handling personal property free of charge. Also, anything attached to the vehicle becomes part of the vehicle. Even if there is a lien on the accessory (like wheels and tires), the courts have ruled the lien on the whole takes precedence over the lien on the part. We had a guy sue us in small claims court over an aftermarket radio we refused to remove. He lost. We had a wheel rental company sue us over wheels and tire they financed. They lost. I try to have the debtors clean out their property when I pick up a car, I don't want to spend an hour or two bagging and tagging their stuff. The best advise here is that if your vehicle is out for recovery, take whatever you want off and out of it.

• My car was repossessed with my belonging still in it. and was sold three weeks later without sending out a letter telling me, the time or date of sale is there any thing i can do about It.

• The repo company cannot charge you for getting your personal property from the car they can charge you a fee if they actually do something like inventory and bag your personal property.

• Repo companies can charge for your possessions as if you voluntarily give the car back to the lien holder you can clean out the car yourself if the repo man has to hunt you down and then pay someone to clean your belongings out they recoup that cost by charging the debtor as far as the kid in the car comment in most states its a far greater crime/issue to leave a child unattended in the car if you leave your kid in the car a repo is the least of your worries

Well, "repo man", a bankruptcy will allow folks to get their car back - even after repo. The clincher is, if the car was auctioned or not. That would be the only obstacle preventing the car from being returned, at least in terms of a Chapter 13.

So, if you want your car back: file Chapter 13 and do it quickly.

I am a repo man, and ironicly this happend on a case last week. The debtor (you in this case) filed for bankruptcy at 8:00am. I repoed his car at 7:30pm that night. After a few days on the phone with his laywer, and bank, the car was returned at the descretion of the bank. So, if you file before your car is repo'd, you can keep the car for that period of time. Your report will show what the bank wants to say, call them about it.

No, it is not easy to hide a car, e.g. a car was 15 miles from the persons house under a tarp, under a pile of hay, inside a barn (that was open), and we got it. Once your car is repo'd that's it, bankruptcy cannot help.

.

FYI; I still have my truck via a Chapter 13. It ain't pretty but it's better than a repo on my credit. A chapter 13 restructures your debt into a new payment plan so if you're way behind like I was, the minute you file you are automatically current. I was paying $475/month for my truck and under my Ch 13 plan I'm paying them $255/month. Also, they also only award the NADA value of the vehicle which was nice for me cuz my loan balance was $15,000 but my truck was only worth about 10,000.

Somthing to think about.

The answer depends on the laws in your state.

• In some states if you don't pay, you lose it.
• In Mississippi, after the bank sells it, they cannot make a profit. They have to send you what's left.
• Not ALL lenders have to return the overage. Some only have to return 85%.
• Yes, they can still repossess your car, but in most states, if you have paid over 65% of the balance of the loan and the original balance was under $5,400.00, they can't sue you for the deficency balance. Most finance companies, if the vehicle is of any value, will repossess it and resell it to recover any losses they may have.

In Illinois, we are required to report repossessions immediately to the police. In some cities, the police want to know BEFORE we repossess. So when you call your local P.D. to report your car stolen, they can let you know if the car has been repossessed.