In Illinois, repossession law falls under the state's Uniform Commercial Code, the Motor Vehicle Retail Installment Sales Act and the rules set forth by the Secretary of State. Repossession usually refers to vehicles and not household goods, as the resale cost of household products is often not worth the creditor's time. If you are in danger of defaulting on your loan, your creditor can repossess only under state-mandated circumstances.
Security Interest and Legal Default
An Illinois vehicle may be repossessed only if the creditor has a security interest, or legal financial claim to the vehicle. The security interest must be in writing in the vehicle lease. Even if you are behind on only one payment, a creditor can repossess your vehicle in Illinois. However, the default terms must be defined in the lease contract.
Personal Items and Breach of Peace
While a creditor may take your vehicle at any time, the state laws surrounding the repossession favor the consumer. For example, the creditor must return your personal items at your request or the repossession may be overturned in court. The repo man may not threaten or coerce you, break into your private property or take your vehicle from your home without your permission or he will be in violation of Illinois breach of peace laws.
Redeeming Your Repossession
If you own more than 30 percent at the time of repossession, which includes your down payment and all subsequent monthly payments, Illinois law states that your creditor must give you 21 days to redeem the vehicle. In these cases, the price you owe is the overdue amount, late charges and repossession expenses. If the car is repossessed more than once, the 30 percent rule does not apply to the second or subsequent repossessions. For all other cases, the consumer may redeem the car by paying the creditor the full contract on the loan before the creditor resells the vehicle.
Preventing a Repossession
To prevent a repossession, consider filing bankruptcy. While harmful to your credit rating, a bankruptcy status will force an automatic stay on the repossession, which prohibits the creditor from taking further action. You should also ask your creditor for a payment plan or extended grace period. You also have the option to sell your car or find a friend or family member to take over the payments.
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