Motor Vehicle Repossession Laws in South Carolina

People often find themselves struggling to pay car loans. When this happens, lenders can repossess, or take back, the car. They can then sell it to satisfy the loan amount. In some instances, the lender may choose to keep the repossessed car rather than sell it. Like all states, South Carolina has specific rules governing when and how cars can be repossessed.

Default Rules

South Carolina allows lenders to repossess motor vehicles when borrowers default. Some lenders consider a borrower in default if she allows the car's insurance to lapse, permanently moves the vehicle out of state without authorization or damages the car to decrease its value. Typically, however, default means a person is 10 days late on a payment. At this point, the lender must send a "Notice of Right to Cure" informing the borrower that she has 20 days to bring the loan current to avoid repossession. Note that, if you catch up on your payments but fall behind a second time, your lender can repossess your car with no notice.

The Repossession

Lenders have two repossession options in South Carolina. One involves filing a Claim and Delivery lawsuit against you. Theoretically, your car cannot be repossessed under a Claim and Delivery suit until after you and your lender appear at a court hearing. The lender can, however, be granted permission to repossess before the court date if he can show reason to believe that you will hide or damage the car. Under the second type, self-help repossession, the lender can simply come and tow your car from any location--your driveway, your workplace, the street or a parking lot. The only stipulation is that it be done peacefully.

Reclaiming Your Car

You have the right to reclaim your repossessed car. After repossessing, the lender will send you a Right to Redeem notice explaining what will happen to the car and how you can get it back. The lender can require you to pay off the entire balance and may also make you pay expenses associated with having repossessed your car. Borrowers have only about two weeks to meet the requirements. After that the lender is entitled to do as he pleases with the car.

If You Can't Reclaim the Car

South Carolina law allows a lender to sell a repossessed car if the borrower is unable to reclaim it. If the borrower has paid 60 percent or more of the loan, the borrower can force the lender to sell the repossessed car within 90 days. Any money left after settling the loan and covering the expenses associated with selling and repossessing the car must be given to the borrower after the sale. If the borrower has paid less than 60 percent of the loan, the lender may sell the car. If the lender gets more money than was owed on the car, he may keep it. If he gets less, he may go to court and seek a judgment against the borrower for the difference between the amount owed and the amount actually received for the car. Attorney fees, repossession costs, sales costs and car repair costs may be added to this judgment.