Repossession

If you have had your vehicle repossessed, you may need legal advice immediately. Our firm does not charge for a consultation and when we accept a case, it is on contingency basis, meaning that we must get our fees from the defendants in the case.

The legal ramifications of a repossession can be significant affecting your credit and your livelihood. In most cases, when dealing with a finance company, if you do not pay to retrieve your car after a repossession, the car will be sold at auction and a deficiency for any amounts owing on the contract will be sought. If the car was purchased in California, the lender will be required to send a letter to your last known address giving you an opportunity to get the car back before it is sold at auction. The letter is referred to as a Notice of Intent to Sell or NOI. There is a time limit for you to act, so you should contact an attorney regarding the repossession immediately.

To get your car back, you may be allowed to reinstate the loan, that means to bring the payments current and continue with monthly payments as they come due. To reinstate you would have to pay the repossession fees, storage fees, law enforcement fees and all loan payments that you currently owe including late fees and interest. There may be additional fees depending on the circumstances of your case. One common reason for denying someone an opportunity to reinstate the loan is where the car was previously repossessed within 12 months of the second repossession. Another reason for denying reinstatement is when the buyer hid the car after failure to make payments on the loan.

To get your car back, you may have the option to redeem the contract completely, by paying off the full amount of the loan and thereby get title when you get the car back. This is called “redemption.” To redeem you would also have to pay the repossession fees, storage fees, law enforcement fees and other charges. The NOI should also tell you when, to whom, and precisely how much you will have to pay.

If you do not retrieve your car and it is sold at auction, the auction price received will be deducted from what you owe on the contract, as well as costs for the repossession and sale. In most cases the auction price is a low-ball wholesale price and doesn’t cover the total amount owed on the car. The finance company will, in most cases, proceed against you for the difference owed on the contract and other costs to file a case against you for breach of contract.

The lender will send you a deficiency letter following the sale of the car at auction indicating what you owe at that time. It is important to seek attorney advice at that time, because the lender may have failed to comply with the law in notifying you of your opportunity to get your car back. The NOI has to be very specific and many consumers do not realize they have a legal defense to the alleged deficiency. Note that it is important that you provide the lender your current address so that you receive the legally required letters involving the repossession process. Keep those letters so that they can be reviewed by counsel. You will also need copies of your vehicle sales contract. Keep all the documents involving your car, including purchase documents, in a folder at home. Do not use your car’s glove box as your filing system.


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