In the United States, vehicle repossession laws are mandated at the state level to protect both consumers and lenders. In most states, a repo man can legally take your vehicle without your permission, as long as the car loan agreement is in default. However, repo men cannot violate your state's breach of peace laws, which include any unnecessary harassment or unlawful entrance to your home.
Breach of Peace
While a repo man can take your car without warning, he cannot threaten or use force, enter your home or disrupt the peace in any way. If you believe that a repo man violated your state's breach of peace laws, you can take your lender to court to nullify the car loan agreement, repossession charges or any existing deficiency, which is the amount of money left on the car loan after the dealer sells the car to the next buyer. To find out your state's individual vehicle repossession laws, visit your state's attorney general website.
Personal Items
A repo man can take your car without notice, but he may not take any personal items left inside the vehicle, such as your CD collection, wallet or sports equipment. If the items are still in the car at the time of repossession, the lender must return your items at your first request. If you do not receive your items within the timeframe and manner set by your state's repossession laws, you may sue the lender for theft.
Legal Reason for Repossession
Your car loan agreement will dictate when a repossession can take place. In most states, a lender can only repossess a vehicle if the payments go into default after a set period of time, such as two missed payments.
Notice of Repossession
Once a car has been repossessed, the lender has a state-mandated amount of time to notify you of the repossession and list your options, which may include an opportunity to buy back the vehicle from the lender, or bid on your vehicle at a future auction. In some states, such as Illinois, you may only have to pay the overdue amount if you have already paid for a certain percentage of the vehicle.
Tips/Solutions
A surprise repossession can cause a lot of stress and financial problems, particularly if your deficiency is high or you are charged additional repossession or auction charges. To avoid the headache, try working out an agreement with your lender if you miss a payment. Lenders are more likely to avoid a repossession if they can help you, and you may be able to start a payment plan. If you cannot make your payments, consider selling your vehicle to a family member or friend who can take over the payments. If all else fails, consider filing bankruptcy, which will absolve the debt in some cases.
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