Oregon Auto Repossession Rules

Many car owners buy their automobiles with a car loan provided by a creditor. When this car loan goes unpaid, the specter of a car repossession looms over the borrower. Oregon allows for car repossessions, although the state has specific laws that govern these actions. Talk to an Oregon attorney if you need legal advice about a car repossession.

Security Agreements

When you buy a car using a loan, you and your creditor enter into a security agreement. A security agreement is a type of loan in which the creditor requires you to give up collateral. In this case, the collateral is your car. If you do not repay the loan, the creditor has the right to take back the collateral. These security interests give your creditor an interest in your car, meaning that if and when they repossess it, they do not have to go to court to ask permission.

Titles

When a creditor takes a security interest in your car, your car title must indicate this. Your car title is the official document that proves who a car's owner is. In Oregon, the Oregon Department of Motor Vehicles must keep a record of this title and is the only one authorized to issue new titles. For example, if you take out a car loan through your bank, the bank's name is listed on the car title that you have and the one kept at the Department of Motor Vehicles. If no lien is indicated, the creditor has not perfected the security interest and does not have the right to repossess the car.

Default Terms

A creditor has the right to repossess your car when you go into default on your loan. The conditions under which this happens vary based on the terms of the loan, however. For example, your creditor can require you to make monthly payments every month until you pay back the loan. If you miss a payment, or are late, the creditor may repossess your car if the terms of the agreement allow for it. Creditors typically, however, do not repossess the car until you have fallen delinquent on several payments.

Repossession

The main limitation on the creditor's right to physically take back your car is that in doing so the creditor must not violate any laws. For example, a creditor cannot assault you or physically force you out of your car to try to repossess it. Creditors can, however, hire collections agencies to find your car, get into it in the middle of the night and drive it away without telling you. Because the car is the creditor's property, no laws are violated even if they break into the car or damage it in the process.