What should I do if my car was repossessed?
Review the terms of your contract and paragraghs governing default and repossession of a vehicle.
Repossession refers to taking back property through judicial processes, foreclosure, or self-help when a creditor fails to make required payments. Many types of property are subject to repossession when there are loans securing the property or liens on the property, such as houses, cars, and furnishings.
If your car payments are late or you default on your contract in any way, your creditor or lessor may have the right to repossess your car. In many states, creditors or lessors can do this legally without going to court or warning you in advance, as long as they do not breach the peace. In addition, your creditor or lessor may be able to sell your contract to a third party, called an assignee, who may have the same rights and responsibilities as the original creditor or lessor.
You have the right to get the car repossessed back by paying the overdue amount, plus any fines and costs. These can be rather steep. If you can't or won't pay, the repossessor must give you notice of the auction. You can bid on your own car. If they get less than you owe as the winning bid, you'll owe the rest. You are usually entitled to get your belongings which were inside the car back, but only within the short period of time in your contract. Since state laws vary, check to see if this applies in your state. State laws also may require your creditor or lessor to use reasonable care to prevent others from removing your property from the repossessed car. If you find that your creditor or lessor cannot account for articles left in your car, talk to an attorney about whether your state offers a right to compensation. Some state laws limit the ways a creditor or lessor can repossess and sell a vehicle to reduce or eliminate your debt. If any rules are violated, the creditor or lessor may be required to pay you damages.
After car repossession, the lender might be able to accelerate, meaning the lender can require the borrower to pay off the entire balance of the loan in order for the borrower to get the vehicle back. Contract terms and state laws vary, so they should be consulted to determine applicable rules governing a particular situation.
Here are some applicable provisions from Chapter 348 of the Texas Motor Vehicle Installment Sales statute which may be helpful.
Pertaining to Repossession
§348.411. PROHIBITION ON CERTAIN ACTS OF REPOSSESSION. A retail installment contract may not:
(1) authorize the holder or a person acting on the holder's behalf to:
(A) enter the retail buyer's premises in violation of Chapter 9, Business & Commerce Code; or
(B) commit a breach of the peace in the repossession of the motor vehicle; or
(2) contain, or provide for the execution of, a power of attorney by the retail buyer appointing, as the buyer's agent in the repossession of the vehicle, the holder or a person acting on the holder's behalf.
Governing personal posessions retained after repossession:
§348.407. RETENTION OR DISPOSITION OF NONATTACHED PERSONAL PROPERTY. (a) If a retail installment contract authorizes the holder or a person acting on the holder's behalf to retain or dispose of tangible personal property acquired in the repossession of a motor vehicle that is not attached to the vehicle and not subject to a security interest, the contract or another writing must require the holder to send written notice of the acquisition of the property to the retail buyer in accordance with this section.
(b) The notice must be mailed or delivered to the most recent address of the retail buyer shown on the records of the holder not later than the 15th day after the date on which the holder discovers the property.
(c) The notice must:
(1) state that the retail buyer may identify and claim the property at a reasonable time before the 31st day after the date on which the notice was mailed or delivered; and
(2) give the location at which and reasonable times during the period that the retail buyer may identify and claim the property.
(d) If the property is not claimed before the date described by Subsection (c)(1), the holder may:
(1) retain the property subject to any legal rights of the retail buyer; or
(2) dispose of the property in a reasonable manner and distribute any proceeds of the disposition according to applicable law.
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