A vehicle is a necessity in almost every community; it is your livelihood. Unfortunately, with that huge responsibility comes a car payment, insurance, maintenance, and many other items. If you miss too many payments or do not have sufficient insurance, you may lose the privilege to drive. Whether you are leasing or financing your ride, you need to know what is involved in the repossession law in your area.
If the loan or lease becomes delinquent, a creditor may agree to change the payment date, but in some cases the original contract may not apply. Oral agreements may not withstand court procedures so always get changes in writing. Most states allow the creditor to repossess the vehicle off your property without notice. However, breach of peace will prevail. Simply stated, physical force or removal from a closed garage without permission is a breach.
Sale of the Vehicle
After repossession, the creditor can resell it at a private or public auction or keep it as compensation for the delinquent debt. You have several options at that time. You can pay the full amount owed, including late payments and repossession fees, storage, attorney fees, and other expenses and get your car back. Some states allow the person to reinstate the loan, and all terms must be met as requested by the creditor.
Property in the Vehicle
The creditor cannot sell any personal items in the car and must, in some states, provide a list of items found in the vehicle at the time of the repossession. If items are missing, an attorney can be contacted for your rights for compensation for them.
Electronic Disabling Devices
Some creditors require an electronic device be installed in the vehicle to disable the vehicle from starting if payments are not made on time. This depends on state laws because some states deem this as a breach of peace. An attorney or your State Consumer Protection Agency will assist you with this matter.
Hiding a Vehicle and Bankruptcy
In some states, concealment to hinder repossession is a felony. Instead of hiding the vehicle, maybe bankruptcy would be a better move on the part of the debtor. In the worst case scenario, the car can be legally held until the bankruptcy hearing. The trustee can then decide whether the vehicle is essential for work. If that is the case, the creditor can agree to reaffirm the loan and allow payments to continue under the bankruptcy ruling.
In any event, you need to research the laws in the state where you reside. Each state may have different laws reflecting repossession of a vehicle. If you cannot find the information, it is a much safer bet to hire an attorney like Philip L. Burnett, Attorney At Law.