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.
Discretionary Notice
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.
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.
References
- Federal Trade Commission: Vehicle Repossession - Understanding the Rules of the Road
- Federal Trade Commission. "Vehicle Repossession." Accessed April 7, 2020.
- Consumer Financial Protection Bureau. "If I Can’t Make My Auto Loan Payments, Will My Vehicle Be Repossessed?" Accessed April 7, 2020.
- Commonwealth of Massachusetts. "What to Know if Your Car Is Repossessed." Accessed April 7, 2020.
- Los Angeles County Consumer & Business Affairs. "Vehicle Repossessions." Accessed April 7, 2020.
- Experian. "How Long Does It Take for a Repossession to Come off Your Credit?" Accessed April 7, 2020.
- Association of the Bar of the City of New York. "Repossession." Accessed April 7, 2020.
- Experian. "Collection Accounts for Repossessed Car in Credit Report." Accessed April 7, 2020.
- Consumer Financial Protection Bureau. "My Car Has Been Repossessed, and I Was Told It Will Be Sold. What Can I Do?" Accessed April 7, 2020.
- Justia. "Vehicle Repossessions and Bankruptcy." Accessed April 7, 2020.
- Consumer Financial Protection Bureau. "What Happens If I Left Some of My Personal Possessions in My Vehicle When It Was Repossessed?" Accessed April 7, 2020.
- Georgia Consumer Protection Division. "Repo Company Charging to Return Belongings Left in Vehicle." Accessed April 7, 2020.
Writer Bio
Leah Waldron is the head of Traveler Services at First Abroad, a gap year travel company based in Boston and London. As a travel, research and LGBT news writer, Waldron has publication credit on magazines and newspapers including "Curve Magazine," "USA Today," "The Sun Sentinel" and the "The Houston Chronicle." Waldron has a bachelor's and master's degree in creative writing from Florida State University.