What Is the Legal Way to Repo a Car in Montana?

When you take out a loan for a vehicle, you agree to pay the loan back in exchange for the use of the car during the loan period. If you fall behind on your payments, your lender may repossess the vehicle. In Montana, lenders may repossess vehicles either with or without a court order as long as they follow proper procedures.

If a debtor defaults on the obligation to pay back a vehicle loan, the lender may repossess the vehicle without a court order if he can do so peacefully. Peaceful repossession requires the cooperation of the debtor. The repossessor may not take the vehicle without the debtor's consent or while the debtor is not present. The repossessor also may not break into a locked garage or other area to repossess the vehicle.

If the debtor refuses to consent to repossession, the repossessor must get a court order. In this case, the repossessor sues the debtor for the amount of the debt. If the judge agrees that the debt is valid, the repossessor can ask the court to order repossession. The debtor must turn the vehicle over to the lender or allow the lender to repossess it after a court orders the repossession.

If the vehicle is repossessed, the debtor has the right to redeem it prior to sale. The debtor may redeem the vehicle by paying the loan in full plus the cost of towing and storing the vehicle. In Montana, the debtor has 10 days to redeem the vehicle after it is repossessed. After the tenth day, the lender has the right to re-sell the vehicle to cover its losses.

The lender must provide the debtor with written notice of the intention to resell the vehicle. Once the vehicle has been sold, the lender must apply proceeds from the sale to the debtor's outstanding loan. If the sale does not cover the entire balance owed, the debtor must pay the difference. However, if the debtor has paid more than one third of the purchase price and voluntarily gave up the vehicle (e.g. without the repossessor going to court), she cannot be held liable for this amount.