Repossession refers to taking back property through judicial processes, foreclosure, or self-help when a creditor fails to make required payments. Many types of property are subject to repossession when there are loans securing the property or liens on the property, such as houses, cars, and furnishings.
If your car payments are late or you default on your contract in any way, your creditor or lessor may have the right to repossess your car. In many states, creditors or lessors can do this legally without going to court or warning you in advance, as long as they do not breach the peace. In addition, your creditor or lessor may be able to sell your contract to a third party, called an assignee, who may have the same rights and responsibilities as the original creditor or lessor.
You have the right to get the car repossessed back by paying the overdue amount, plus any fines and costs. These can be rather steep. If you can't or won't pay, the repossessor must give you notice of the auction. You can bid on your own car. If they get less than you owe as the winning bid, you'll owe the rest. You are usually entitled to get your belongings which were inside the car back, but only within the short period of time in your contract. Since state laws vary, check to see if this applies in your state. State laws also may require your creditor or lessor to use reasonable care to prevent others from removing your property from the repossessed car. If you find that your creditor or lessor cannot account for articles left in your car, talk to an attorney about whether your state offers a right to compensation. Some state laws limit the ways a creditor or lessor can repossess and sell a vehicle to reduce or eliminate your debt. If any rules are violated, the creditor or lessor may be required to pay you damages.
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. Contract terms and state laws vary, so they should be consulted to determine applicable rules governing a particular situation.
Information about a car repossessed without your knowledge can often be obtained from your bank or the local sheriff's office.
Banks will hire a recovery agent or a skip tracer to find the vehicle. In many states, your creditor or lessor has legal authority to seize your vehicle as soon as you default on your loan or lease. Because state laws differ, read your contract to find out what constitutes a default. In some states, failure to make a payment on time or to meet your other contractual responsibilities are considered defaults.
If your creditor or lessor has agreed to change your payment date or any other contractual obligations, it’s possible that the terms of your original contract may no longer apply. Such a change may be made orally or in writing. It’s best to get any changes in writing because oral agreements are difficult to prove.
