Designed to protect both consumers and creditors alike, vehicle repossession laws are mandated at the state level to control the how, when, why, and even where of car repossessions. Regardless of where you live, the creditor must follow the law when repossessing your car or you can take him for an equally uncomfortable ride.
Under most state laws, a creditor can repossess your leased or financed vehicle if your payments go into default or if the vehicle is not properly insured. Your car lease or contract should stipulate when a default status occurs, but a creditor can otherwise repossess at any time, even without notice.
Breach of Peace
In most states, a repo man can enter your exterior property, such as your yard or your driveway, without breaking any laws. However, the extent of his force is limited. For example, a repo man cannot use any unnecessary force to obtain your vehicle, break any locks on your property or otherwise harass you or your household members in any way, or he may be breaking your state's breach of peace laws. Keep in mind that in some states, a repo man cannot enter a closed garage without your permission since that would be moving from your exterior to your interior property. Depending on the repo man's offense and the state you live in, you may be able to seek damages from the creditor for the breach of peace.
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Whether it's your teen's soccer equipment, your CD collection, or even a wallet or purse, the personal items in your car are not up for grabs in a car repossession. Most states will require the creditor to notify you upon discovery, at which point the items will be returned to you.
If your car has been repossessed and you want it back, the state you live in will dictate the time line and procedures to do so. In some states, you can buy back your repossessed car if you pay for the past amount due, including any repossession charges, while other states only extend this right to consumers who have already paid a percentage of the loan. In Illinois, for example, a creditor must give you the option to buy back a car within three days if you have paid off more than 30 percent of the car.
The creditor's ability to sell your repossessed vehicle is dictated at the state level. Some states will require the creditor to notify you of the auction ahead of time, which will give you the chance to purchase your car back for a lower price. Otherwise, the sale price the creditor receives for your vehicle will dictate the difference that you still owe on the vehicle, which is called a deficiency. However, if you do not believe that the car was sold in a reasonable way, you can take the creditor to court to reverse the deficiency payment.
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