Normally, a contract is signed when the borrower buys a car on credit. This gives the lender an interest or right with respect to the said vehicle. If you were to default under the provisions of the contract and relevant state law, taking possession of the car would not be one of the processes that the lender would have to pursue; repossession would be said to take place. (You would have defaulted by failing to make payments or not maintaining necessary car insurance, for instance.) When your car has been repossessed, understanding your legal options becomes crucial to protect your rights and possibly recover your vehicle.
Sometimes, a lawyer could be hired to help, for example, if there was improper repossession while payments were current or to prevent a deficiency judgment. In other situations, consider offering to settle the debt for the car instead of giving attorney fees, for example, if you were late with your payments but have money to reinstate or redeem the car.
So, basically, after repossession by the car lender, depending on your goals, you would require an attorney or not.
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How Does a Repossession Work When Your Car Has Been Repossessed?
Each state has its own regulations governing repossession. The rules say that the lenders generally are not expected to ‘breach the peace’ while repossessing the cars. Thus, if your car has been repossessed, the agent cannot use or threaten to use force or violence, break open locks, or damage property while attempting to take the vehicle.
When To Consider Hiring An Attorney Following Repossession?
When your car has been repossessed, you should think about hiring, consulting with, or approaching an attorney when:
- The lender wrongfully repossessed the vehicle.
- You are a member of the military.
- You are looking to avoid a deficiency judgment.
Wrongful Repossession by Lender
If the lender repossesses the vehicle while you are current in your payments, meaning you were not in default of any other agreement, then you will need an attorney to sue for the recovery of the vehicle.
For instance, suppose you sent in your monthly payment a week late, and the lender repossessed your car. But your contract says that you are not considered in default unless you are more than 30 days late in your payment. Here, the lender would have no legal basis for repossessing your car. A careful review of the documents you signed when you took out the loan should clarify what constitutes a default in your case.
The attorney may advise that, despite the loan contract’s lack of an explicit grace period for late payments, if the lender previously accepted late payments without manifesting a default or otherwise modified the agreement’s terms—for instance, by adjusting the due date—these aspects might nonetheless provide a basis for your case.
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When You Might Not Need an Attorney When a Car Has Been Repossessed?
Below are some of the circumstances when you probably don’t need to hire an attorney after your car has gone into repossession.
Not Wanting the Car Back
If, from the beginning, you knew you could not afford payment, and now you simply are not interested in the car anymore, you most probably don’t need to hire an attorney unless you plan to be sued later on for a deficiency balance, which may not even happen. The lender might just decide that it is not worth it to pursue a deficiency, and some states put caps on deficiency judgments after repossession: for instance, sometimes those judgments are not available if:
- The amount still owed is not more than a few thousand dollars.
- The initial pricing was worth less than a few thousand dollars.
Wanting the Car Back and Having Money to Meet the Obligation
If you wanted the car back and had sufficient cash available to reinstate the loan or redeem the car, you probably wouldn’t need to hire a lawyer.
To Reinstate the Loan
In some states and under certain loans, the car has been repossessed, but the loan can be reinstated by paying the overdue amount, along with repo and other costs. If the loan is reinstated, the borrower must make timely payments and comply with the further terms of the reinstated contract to avoid another repossession.
To Redeem the Car
The car is reclaimed after paying the loan in full, including repo costs; this process is known as redeeming the vehicle.
Auctioning the Car
On the repossession of a car by the Lender, you might attend the auction and place bids on it. Remember, however, that if you bought the car at the auction, the deficiency could still come back to haunt you.
Final Thought
Again, if you are going to redeem the car, reinstate the loan, or buy the car back at auction, you probably do not have to hire an attorney. However, if your car has been repossessed illegally and the lender is not cooperating, hiring or at least consulting a local attorney is something you should consider.
Bruner Wright PA can help determine whether the lender acted unlawfully and assist you in getting your vehicle back—either by negotiating directly with the lender or by filing a lawsuit on your behalf. Contact Bruner Wright PA today to protect your rights and get the legal support you need.
In a Hurry? Dial +18-503-850-342 Now!
Need help? Connect with our top bankruptcy attorney in Gainesville, FL, and Avondale now!