What is a Car Repossession?
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Car repossession occurs when a person falls behind on their car payments and the creditor reclaims the car. The basic idea behind car repossession is that the car has been bought on a hire purchase or loan agreement. This means that the goods you have bought are not legally yours until payment for the goods has been settled in full. Once this has been achieved, you will be classed as the rightful owner of the goods.
If you fail to keep up the payments as stated in the agreement, then you can face repossession of the goods. If this happens, then a lender can take legal action against you for the money owed to him. Unless you have a grace period set out in the agreement, a creditor can take your car back if you are only a day late with payments.
Different states have different car repossession laws, but the creditor usually does not have to give any notice when taking back the car. There is no legal requirement for you to return the car, but the creditor may simply take it from the street or a parking lot. In a car repossession case, if you attempt to conceal your car with the aim of stopping the creditor from reclaiming it, this may be considered a legal offence.
With car repossession, the creditor may sell your car at an auction to regain some of his money. However, you will still be liable for the rest of the balance outstanding on your car. You may also be liable to pay the creditor’s expenses for the time and money involved in the car repossession.
Chapter 13 is a law that can prevent car repossession from happening. If your car has been repossessed but not sold by your creditor when the case is filed, the court may tell the creditor to return your car. With Chapter 13, interest charges can be reduced and monthly payments can often be lowered. In some cases, the balance due on the vehicle may be reduced to the car’s market value, even if it is less than the loan value.
Another benefit of filing for Chapter 13 when faced with car repossession is that the court may order you to pay for your car in a single monthly payment. This will consolidate all of your bills into one payment. This single payment can sometimes be lower than your previous car payment.
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Discuss this Article13
I just had my car repoed last night and all of my belongings were in it. Can I get my things back? I have 200 dollars worth of car seats in my car and everything else. Granted *yes* I couldn't make the payment and I understand *why* they took it, I *don't* have a prob with it (they can have it, who cares) I just want my property that's *in it.* How can I get it back? - mcleod751
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In 2001 we bought a used 2000 vehicle. I needed it for my job and they were going to pay me a car allowance. Right after that, my husband needed back surgery and was out of work for 6 weeks. I, unfortunately became disabled within the year and had to leave my job. I couldn't continue to pay the finance company and asked them to please come get it. At that time, I became totally disabled and told them I couldn't drive anymore. The judge ruled in my favor in June 2004 as permanently disabled. This was a few years after I had given the car back.I was notified that it had been auctioned off soon after that. Two months ago I began getting threatening calls from a different debt collector demanding payment for the car. I don't even drive anymore and my husband drives a 92 van. Any advice? - anon30740
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What can you do when a car is purchased by check (no bill of sale) and the owner never pays off the car loan and now the car is being repossessed? Too trusting!! - Luvmycars29
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Yes it is a felony to run from the repo-man. It has happened to my friend. I got a call from a private investigator yesterday and they have a warrant out for his arrest. They have not been able to contact him or able to locate the car to repo and he hasn't contacted them or voluntarily returned the vehicle and it has been 4 months. He told me he doesn't have the car anymore? They are charging him with Grand theft amongst other things and he could get 10 years.A word of advice, if you cant afford it, give it back. - anon29877
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Re: anon2653- Yes, repossessing can be done on your property legally in all 50 states. If you read your purchase agreement, this is probably noted. It will also tell you that the car is not your property until it is paid off in full, no matter how little is left on the loan. Re: anon3320- Depends how far along in the process you are, and what state you live in. Re: mztazz- If you are behind in your payments, and do not have an amended agreement (in writing) with the finance company, yes they can repo the car unless your state specifically prohibits it. Contact your state Attorney General's office Re: anon4986- The finance company at this point has probably sold the vehicle. You should only be responsible for the amount of the difference between the amount you owed and the amount they sold the car for. Example: you owed 18,000 on the car, they repo'd it and sold it for 14,000. You should only be responsible for the remaining 4,000. At least by turning the car in, you avoided the cost of the repo. re: anon 17970- Yes you're right you will be held responsible for the balance. And yes your wages can be garnished, although the process differs from state to state. Re: butterfli30- Unfortunately you're right. It is more complicated than turning it in and walking away. What will happen is that your creditor will resell the vehicle, and you will be responsible for the difference between what you owe, and what they sold the vehicle for (see my response to anon4986 above for an example). Re: anon22333- Unless I'm mistaken, yes that is a felony in all 50 states. - anon25227
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wondering if you are delinquent and using a different address for mail, and not tell the bank: is that a felony for holding property. Intention is to pay but times have been hard. - anon22333
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I bought a used car in March of 2008, 1996 Nissan Maxima. I think I got a bum deal. I cant afford the car and I want to turn it back in to the bank but I dont know what the ramifications would be, because I'm sure its not as easy as just turning it in and not looking back. Help ! - butterfli30
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I am considering letting my car be repossesed. I got a bad deal on a car I've had lots of trouble with in 2 years; and I can not afford to fix the car again. I'm really upside down in the loan, was from the start; and I can't even trade it or sell it for what I owe. I think letting them repossess it might be my only recourse. I know they can say I owe them whatever is left on the loan after they sell the car, and I know they can turn that into a collection agency; but can they garnish my wages for the balance owed? - anon17970
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I could not make payments on a car, my attorney told me to return the vehicle. I did, but am being forced to pay off the remainder 18,000.00. Is this legal how can i get out of this I am 65 years old and living on a fixed income - anon4986
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I filed chapter 7 approx 2 months ago. I continued making my car payments. The Finance company's lawyers sent the reaffirmation documents for me to sign. I don't have a lawyer to help with negotiations. However I would sign documents if finance company agrees to reduce the balance to the car's market value. Until the Finance comp responds I am covered by the bankruptcy against repossession. The Finance company can present a motion terminating Stay. But can the Finance Company repossessed my car if I am making the monthly payments?? - mztazz
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I am in process of filing bankruptcy. Can they repo my truck? - anon3320
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my car was parked in my private driveway and they repossessed it, is this legal? - anon2653
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