What Can I Do If My Car Is Repossessed?

For many of us, a vehicle is one of our most prized possession. It gets us to and from work, it gets our kids to school, and most importantly it gets us from point A to point B without having to rely on public transportation. Investing in a vehicle for the first time is a liberating experience, however, it's important to keep in mind that a vehicle is a financial obligation. Individuals who buy from a dealership must be consistent with their car payments to avoid a visit from the repossession agents. In addition, a vehicle requires regular maintenance such as oil, tire, and brake changes. Furthermore, you will be required to purchase insurance which can range from one-hundred to three-hundred dollars depending on your location and the year of the car. If you just purchased a year model, you will be required to buy full coverage insurance.

At the end of the month, most individuals are paying between four hundred to eight hundred dollars for their vehicle. When we buy a car that we cannot financially maintain, it is a sign that your car may be repossessed. When a vehicle is repossessed it is time to consider a plan of action. You should go over your contracts and other statements to ensure that the repossession was legal. In addition, you may want to speak with an attorney about your vehicle repossession.

If your attorney is able to prove that your vehicle was not legally repossessed or that the repossession agency was acting unlawfully such as entering your private garage, your attorney can help you fight to retrieve your vehicle. Furthermore, if you have received notice of repossession, you can take certain measures to prevent the action. Individuals who have received a notification of repossession may file for bankruptcy which will stop any vehicle repossession. Of course, do not file a bankruptcy if you are financially stable.

Individuals who are having a hard time making vehicle payments may also be facing other forms of financial stress meaning that they may be falling behind on other payments. When you begin to miss payments on your vehicle and or credit lines, you will feel as though you are on a downward spiral. Debtors who have a difficult time paying off their bills because there has been a change in earning potentials either because they have lost a job or they have experienced a grave injury should consider the benefits of debt relief. When you file for bankruptcy you may discharge credit card loans and you will be capable of negotiating a debt settlement program to pay off your vehicle. Furthermore, if you choose to liquidate your assets, you may walk away without having to pay back any creditor.  

Should I work with an attorney if my vehicle was repossessed?

You may work with an attorney if your vehicle was wrongfully repossessed or if you wish to prevent a vehicle repossession through a bankruptcy. Your vehicle is wrongfully repossessed 1) if the repossession agent has entered a private garage to claim the vehicle, 2) if you were late on a payment and you can prove that the lending party has allowed late payments in the past, 3) if your vehicle was repossessed during a grace period. In addition, if you are military personnel, you cannot have your vehicle repossessed unless the lending party obtains a court order. This is different from regular repossessions which do not require a court order, however, under the Servicemembers Civil Relief Act (SCRA) the repossession or lending party will need to obtain a court order before repossession. If your vehicle was wrongfully repossessed, it is your time to contact an attorney so that you can reclaim your vehicle without having to pay any unwarranted fees.

When you receive a notice of vehicle repossession, you may want to work with an attorney who can help you negotiate with the lending party before your vehicle is repossessed. An attorney can help you achieve lower monthly payments so that they align with your earning potentials. When you cannot keep up with the original agreement, you should speak with the lending party to see if there is anything they can do to help your situation. If they refuse you may want to contact an attorney to see if you have other options.

If you are under economic stress, you should know that there are multiple ways to help you get back on your feet. An attorney can help you negotiate a debt settlement program without having to enter a courtroom or may help you file a bankruptcy. Bankruptcy is a broad term that allows debtors a variety of options when they choose to maintain their property. To learn more about debt relief, you are encouraged to speak with a local bankruptcy attorney. To speak with the Bankruptcy Attorney, you may contact our office at 424-285-5525.

What should I do if my vehicle was repossessed?

Vehicle repossession occurs when the buyer is unable to keep up with monthly payments. As you have seen above, owning a vehicle is so much more than just putting your name on a car. Individuals who fail to keep up with vehicle payments will on the lending parties contact list. You will receive calls until you make a payment or until your car is repossessed. When you fail to contact the lending party for payment or you just simply cannot keep the car, the lending party will contact a repossession agency who will take your car away. The repossession agency will store the car in a parking lot until you decide what you will do with the vehicle. In most cases, after your car has been repossessed for failure to pay you may either 1) reclaim your car by making a payment or 2) you can leave your car with the agency.

  • If you choose to reclaim your vehicle, you will be required to make pay past due amounts and in addition, you may be required to pay for the days that your vehicle spent in their parking lot. The price to reclaim your vehicle quickly adds up which is why most individuals choose to leave their car with the agency. Leaving your car with the agency is not the best idea, but in some cases that may be the only option.  
  • If you choose to leave the vehicle with the repossession agency, you will still have financial obligations. For instance, when you leave your vehicle in repossession, the agency will auction off your vehicle. In most cases, the vehicle is auctioned under its market value which means you will be required to pay the deficiency. The deficiency is calculated by finding the difference between your vehicle agreement and the earnings from the auction. For example, your vehicle contract is a total of $15,000 (your vehicle is $10,000 and $5,000 for lending fees), if your vehicle is auctioned and sold for $8,000, you will be required to pay to the lending party the remaining $7,000.

There are advantages and disadvantages when you leave or reclaim your vehicle, but it all depends on your circumstances. Generally speaking, if you have the money you will want to reclaim your car. When you reclaim your car,  a) you get to keep your car, b) you will not have to pay a deficiency, c) you will maintain a good standing with the lending party. However, if you know that you cannot continue to make payments after you have reclaimed your vehicle, you may want to consider selling your car. When you sell your car, in most cases, you will obtain more than if the car was sold in an auction. The downside is that you will still be required to pay any difference that may still exist in your contract if the earnings are not enough to cover the vehicle loan.  

On the other hand, if you cannot make the required payments to reclaim your vehicle, your only option may be to leave your car. As mentioned earlier, it's not a good idea to leave your car in repossession, but if that is your only option, you should know that it is not the end of the world. The repossession agency will need to make sure that the car is not sold far below the market value. This means that they cannot sell a $10,000 dollar car for $1,000 and expect you to pay the difference. One of the benefits of leaving your car in repossession is that you will no longer be required to pay for insurance and car maintenance. In addition, you may be capable of negotiating the terms and conditions of the remaining balance.

Wrongful Repossessions

As mentioned earlier, a wrongful repossession occurs when the repossession agency breaks a law or an agreement while repossessing the vehicle. A wrongful repossession occurs if:

  • You are an active military personnel: your vehicle was wrongfully repossessed if the agency acted without obtaining a court order. Servicemembers Civil Relief Act (SCRA) requires that before repossession, the agency or lending party must obtain a court order. Acting without one can result in the vehicle being returned without having to pay garage or other miscellaneous fees.
  • The repossession agency has committed a “breach of the peace”: this occurs when the repossession agent either 1) uses force to remove you from a vehicle, 2) tows your car while you are in a vehicle, 3) goes against your objections. There are serious repercussions if your vehicle was forcefully repossessed.
  • The repossession agent has entered a private garage: a repossession is illegal when the repossession agent enters a private property to reclaim a vehicle. For instance, if your garage door is locked, the agent is not permitted to remove the lock or ‘break-in’ in any way shape or form. If your vehicle is behind closed doors and it has been removed by a repossession agent, you will want to contact an attorney.
  • Your vehicle was repossessed during a grace period: if your lending agency has allowed you to make late payments in the past or has agreed to a grace period, they will not be able to repossess your vehicle during that time. For example, if your lending agency understands that you usually submit a week after it is due because that is when you get paid, then they cannot in the future repossess a car during that time period. These situations are usually trickier so you will want to consult with an attorney. Your lending agency will not back you up in these situations.

What happens after my car is sold?

Once your car is sold, there is nothing you can do to reclaim your vehicle. If you want your vehicle back, you will need to act within the time period they provide. Usually, a vehicle is auctioned after no later than a month after it has been repossessed. You have time to act from the time your vehicle is repossessed to a day before the intended auction. An attorney can help you take action during this time period and may help negotiate a modification to your contract to help reduce the monthly payments.

If you choose to let the repossession agency auction off your vehicle, you may later receive notice of a lawsuit from the lending party. The lending party will try to sue you for the remaining of the balance otherwise known as the deficiency. As mentioned earlier, the deficiency is calculated by finding the difference between the earnings of the auction and the amount that you originally owe to your contract. In some cases, the lending party may even pursue with a wage garnishment if you fail to show up at the court meeting or you fail to make payments to the loan. If you receive notice of a lawsuit you will want to contact an attorney who can review your case and provide representation in a courtroom. If your vehicle was wrongfully sold and there is clear proof of breach of the peace, we may be able to help you claim damages.

A vehicle allows us to travel freely and meet many of our daily obligations without having to wait on public transportation. In many cases, a vehicle is an engine behind your ability to work and provide for yourself or your family. If your vehicle was repossessed, you may want to contact an attorney who can help you battle the repossession. To speak with the Bankruptcy Attorney, you may contact our office at 424-285-5525.