We all depend on our cars for traveling and for many other purposes. Life without a car just seems impossible. But what if someone seizes your car and you can't take it back. In this case, understanding some laws regarding repossession would be a huge help.
Car repossession occurs when a person fails to pay the car payments that he/she owes to the creditor, and the creditor takes back the car. If you have bought your car on loan, and you are late with your payments, and you don't even have enough car insurance, your vehicle could be seized. Once you buy a vehicle on loan, your creditor has more rights on the car than you. If you don't make your monthly payments on time, the creditor has the full authority to take back your car without a warning or a court notice in advance. If you have fallen behind your monthly payments, then it is necessary for you to understand the various automobile repossession laws. The good news is that, there are some limitations that the creditor has while snatching away your car, and these limitations vary from state to state.
Law# 1: In many states, the creditor seizes your car the minute you default on your payment. Make sure your contract states what qualifies for a default. For example, not paying monthly payments qualifies for a default in your case. Suppose if your creditor agrees to change your payment date, you should take that in writing and also take his signature.
Law# 2: Once you default on your payment, repossession laws of most states allow the creditor to take your car anytime he wants, without sending you a court notice or warning in advance. The creditor can even come onto your property and do so, and that includes using physical force and threats. In some states, the creditor is not breaking the 'breach of peace' by doing so.
Law# 3: Breach of peace is different in different states. Your creditor will pay a penalty if any harm is done to you or your property. The violation of breach of peace may give you an edge in the legal proceedings against your creditor.
Law# 4: Once your vehicle has been taken, your creditor has the full right to sell it to someone else or keep it as a compensation. In some states, your creditor must tell you the time and place where your car is being sold, so that, if you want to attend the bidding, you can. If the vehicle was sold privately, you have the right to know the sale of the date. You can purchase the vehicle again by paying the full amount and clear your old dues and debts.
Law# 5: Some states have special consumer protection laws, that allow you to reestablish your loan. This simply means that you can get back your car by paying the remaining monthly amounts, with your creditors repossession expenses. This also means that in future, you will need to make your payments on time and would not cause your creditor further worries.
Law# 6: Your creditor is not supposed to keep or sell any personal property found in the car. In some states, your creditor has to inform you what items were found and how you can retrieve them. If he doesn't take much care of your personal items found in your car, you can speak with your attorney about your right to compensation.
Law# 7: Some financiers may not lend you money until you install an electronic device that will not allow your car to start if you fail to make your payments on time. Installing this device could also mean a 'breach of peace' in some states. So, get in touch with your state consumer protection if you want to know the rules of such devices in your state.
Law# 8: It's better to have a word with your creditor then having a dispute later. If you think you are going to be late with your payments, call up your creditor and ask for some time. Most of them have faith in their consumers and give them a few days time. If you are going to change your original contract, get all the details in writing, to avoid questions later. In most cases, they will snatch your car right away, and in many cases, people file for voluntary vehicle repossession to reduce creditor's expenses, which he may charge later.
Try to make your payments on time to avoid any legal mess involved. If you are left with no option and are facing bankruptcy, consult your attorney on information about your rights on your vehicle.