If you're behind with your car payments, the possibility that your vehicle might be repossessed is likely adding to your stress level. Knowing what to expect can help ease some of that stress. If you live in Oregon, you have certain rights and your lender must follow strict rules set by state law. If your lender breaks these rules, you might have a right to sue for damages.
Oregon Repossession Laws: What the Bank is Allowed to Do
A lender can hire a company to repossess your car without notice when you're in default of the terms of your contract, but your contract must clearly state that the lender has a security interest in the vehicle. Without that statement, your car isn't considered collateral in Oregon so the lender can't take it back.
Your lender can take the car from your property as long as it does so peacefully. It can remove it from your driveway or from any public place such as the school parking lot or the grocery store, but it can't use force. If you try to hide your vehicle while you save up the back payments, your lender can get a court order requiring you to surrender it. You may be found in contempt of court if you don't respond to the lawsuit seeking such an order and you'll probably have to pay for the court costs.
Your creditor has the right to sell your vehicle after repossession in Oregon, but it must give you advance written notice. You have a right to stop the sale by paying the full amount of the loan before the sale date. You can also purchase the car back at auction when the lender sells it. No matter who buys it, your lender can sue you to collect the balance if your car sells for less than the amount you owe on the loan, plus repossession costs.
Crossing the Line: Your Rights Under Oregon Law
Although your lender has the right to repossess your vehicle, you have certain protections.
Protection From Force
Oregon law specifically states that lenders cannot use force to repossess your vehicle. This means your creditor can't enter your garage or your home and it can't tow your vehicle off with you inside. It can ask the court for an order allowing the police to force their way into your home or garage, however, if this will allow access to your car. Otherwise, you have a right to sue for damages if a creditor uses illegal force.
Your Personal Property
Any personal items left inside your vehicle are legally yours under Oregon law. The creditor must return this property to you in the same condition it was in when it took your car. It can't be sold to collect on your debt. If your property is damaged during the repossession, or you're unable to get items from the car returned to you, you can sue the lender for damages.
Reasonable Attempt to Pay
The court might deny your creditor the right to repossess your vehicle if you've made a partial payment and your creditor has a history of accepting late or partial payments. Contact an attorney to see if you can get your vehicle back if you find yourself in this situation.
An attorney may be able to help you get your car back -- or keep it from being repossessed in the first place. Sometimes you can keep a car from being repossessed by negotiating a new payment plan and paying any expenses your lender incurred because you defaulted on the loan. You might be able to get your car back after repossession with a similar negotiation.
Filing for bankruptcy will immediately stop the repossession. An automatic stay goes into effect that prevents any of your creditors from doing anything to collect what you owe -- including taking back your car. Discharging credit card or medical debts may free up enough income going forward that you'll be able to resume payments and keep your vehicle, although you'll have to catch up with your past-due payments. An attorney may be able to negotiate with your lender to allow you to make up the past-due amounts over time.