Under Maryland law, a lender can hire a repossession agent to take your car from your home if you default on your car loan. However, the lender must warn you about the repossession before it occurs and the repossession agent cannot use any force to take the vehicle from your property.
Illegal Acts and Breach of Peace
Maryland's repossession law protects the vehicle owner and lender alike. A lender and hired repossession agent cannot use excessive force to repossess a vehicle, as this violates the state's breach of peace laws. However, all owner rights and privileges are forfeited if the owner breaks the law to prevent a repossession from taking place. Examples of illegal behavior include hiding, concealing, damaging or destroying the vehicle, as well as any fraudulent behavior that disrupts a repossession.
Unlike other states, a lender must send you a 10-day discretionary notice by certified or registered mail before repossessing your vehicle from your home. The notice must outline the overdue amount, provide steps to resolve the issue and state an intent to repossess by a certain future date. If you do not receive a discretionary notice before your car is repossessed, you will not owe any additional repossession charges under Maryland law.
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Required and Intent to Sell Notices
In addition to a discretionary notice, a lender must send you a required notice by certified or registered mail five days after your car is repossessed. The required notice must include the car's exact physical location and your options to buy back the car or settle the overdue amount. Keep in mind that once you receive this notice, you only have 15 days to redeem the vehicle before the lender can legally re-sell your vehicle. The lender must provide you with a 10-day intent to sell letter before the auction takes place.
Paying the Deficiency
If a repossession occurred within 18 months of a prior repossession, the lender can take you to court for the full amount of the car loan agreement. Otherwise, the lender may sell the vehicle at auction to recoup any losses. If the vehicle sells at auction, the lender will send you a letter that outlines the final sale price and the remaining amount due on the loan, which is known as the deficiency.
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