- In most states, if you default on your car payments, the lender has the right to repossess your car.
- However, there are specific laws and procedures that the lender must follow in order to legally repossess your car.
Breach of Contract:
- Failure to make payments as agreed upon in the loan contract constitutes a breach of contract.
Notice Requirement:
- Before repossessing your car, the lender must send you a notice of default which provides information about the missed payments, the amount owed, and the consequences of failing to cure the default.
Right to Cure:
- Most states provide borrowers with a right to cure the default within a specified period, usually 10 to 30 days after the notice of default. During this time, if you pay the missed payments and any associated fees, you can prevent repossession.
Time & Location of Repossession:
- Repossession must occur during reasonable hours and cannot involve breaching the peace.
- It is generally not allowed inside a private property like your home garage without a court order or consent.
Illegal Repossession:
- Repossession that violates the law (e.g., repossession without proper notice or during unreasonable hours) is considered an illegal repossession.
Consequences:
- If the lender illegally repossesses your car, you may have legal remedies, such as filing a lawsuit to recover damages.
- If your car is repossessed legally, you may still have options such as redeeming it by paying the outstanding debt or working with the lender to reach an agreement.
Recommendation:
- Communicate: If you're unable to make payments, proactively reach out to your lender to discuss options and avoid delinquency.
- Review your rights: Familiarize yourself with your state's repossession laws to ensure your rights are protected.
- Seek Legal advice: If you believe your car was repossessed illegally, consult with an attorney to explore your legal options.
