What is a Wrongful Repossession and Can You Fight It?
One of the most freeing feelings in the world is having your own vehicle to go wherever you want, whenever you want. The easiest way to get a car is to get it financed — and that’s what almost 85% of consumers did as recently as 2013.
There was also an increase in instances of repossessions in 2013: almost 17% more than in previous years. With repossession occurrences so high, there is plenty of room for margin of error, such as a wrongful repossession. So what happens if you default on your financing, and the repo man is lurking on your block?
How Car Loans Work
When you finance a car, the vehicle has a lien placed on it. A lien allows the finance company the right of repossession until you’ve paid the vehicle off. A typical car loan should get paid off over 36 to 72 months.
The finance company will apply an annual percentage rate of interest to your loan. The total loan amount has the percentage applied to it, then multiplied over however many years you’ll be paying on your car.
If you fail to meet your contractual obligation, you put yourself at risk for repossession.
What Is Wrongful Repossession, and How to Handle It
Wrongful repossession is when the collateral (your vehicle) you put up for your loan is taken back by the lien holder, either unlawfully or by mistake.
Repo companies can’t trespass on private property to take your car, but they can take the car from your driveway. Additionally, repo men can’t “breach the peace,” meaning they can’t threaten you in any way, shape, or form.
You should also note that the police can’t help the repo man take your vehicle. Police can’t ask you to relinquish your keys, vehicle, or to step aside so that your vehicle can be taken. Repossessions are private matters strictly between the lender and the borrower and can’t be settled with police.
If you made all on-time payments, or you were adhering to alternative arrangements made with the finance company and your vehicle was repossessed, you might be wondering what your rights are now.
The first thing you’ll need to do is gather all your payment information so that you have it on hand when you contact the finance company. You may also want to contact wrongful repossession lawyers to find out what your next steps should be.
How to Prevent Repossession
You can bet that your creditor is keeping track of payments via paper trail or record keeping. The number one thing you can do to protect yourself from repossession (aside from making on-time payments) is to keep a paper trail or some sort of record of all payments made. Keep your documentation in a safe place in case you ever need it.
Creditors have a right to pursue bad debt, but borrowers have rights too. Communicate with your finance company. It’s easy to dodge those phone calls asking for money, but simply answering the call and explaining your situation to the finance company could be the difference between repossession and negotiation.
The best piece of advice you could possibly receive (aside from to meet all contractual obligations in a timely manner) is to keep a record of all of your payments or alternative arrangements with your finance company. If you face repossession, document the event, especially any occurrences of breaching the peace.
It’s scary and frustrating to face repossession, but you don’t have to do it alone. The best way to get guidance on your unique legal issue is to contact us. We can help you fight wrongful repossession.