In California, hundreds of vehicles are repossessed each day. Fortunately, California requires that finance companies and repossession companies adhere to several laws when repossessing a vehicle. Oftentimes, these laws are not followed, which provides consumers with remedies against finance companies and repossession agents for unlawfully repossessing vehicles. As a San Diego, Los Angeles, and California auto repossession lawyer, I want to make sure you know your rights....before and after a vehicle repossession.
In California, if you are late even one day on your monthly vehicle finance/loan payment, you are in default and the finance company has the right to repossess your vehicle. In order to prevent your vehicle from being repossessed, you have a few options:
Pay the past-due balance on your account immediately. Once you become current on your vehicle loan, the lender no longer has the right to repossess your vehicle for defaulting on your payments.
Call your lender to work out a payment plan or obtain permission to make a late payment. Your lender may work with you and allow you to make a late payment or setup another payment plan to pay off the amount you have fallen behind. Although this does not work all the time, in some situations it is worth a try and may prevent repossession of your vehicle. Please note: it is extremely important to document everything that is agreed upon in writing. Ask your lender to send you a letter explaining what was discussed and agreed upon. At the very least, take good notes of your entire conversation including the agreement. This will prevent a "he said, she said" dispute if the verbal agreement is not honored by the lender.
Bankruptcy may be an option. A Chapter 7 Bankruptcy will temporarily stop the lender from being able to repossess your vehicle and may provide you with sufficient time to make a payment to bring your account current. A Chapter 13 Bankruptcy may also be an option. Chapter 13 would allow you to keep your vehicle and catch up on the back payments by repaying the amount your behind over a 3 or 5 year period.
After Your Vehicle Has Been Repossessed
Unfortunately, this is the situation that many people are in when they start looking for help regarding repossessions. This can be a very stressful time. A vehicle that you have been relying on to go to work or school has now been taken from your possession, and most people during this time, do not have the funds to purchase a new vehicle or even pay for a rental vehicle. If this is the situation that you are in now, you have rights.
First you must determine whether the repossession was lawful. In order to the determine whether a lawful repossession occurred, a review of the following is necessary:
Were you in default?
Sometimes creditors will repossess a vehicle when the payments were current. In cases such as these, the lender did not have the right to repossess your vehicle. You should be entitled to the return of your vehicle and damages.
Was your vehicle repossessed by a previous owner's lender/finance company? Sometimes, after a private sale of a vehicle (sale between two consumers from Craigslist or Autotrader), the previous owner's finance company mistakenly or intentionally repossesses the vehicle from the new owner. Unfortunately, this is a very common occurrence. Here is an article providing more information about this type of wrongful repossession.
Review the vehicle finance contract and vehicle title. Oftentimes, there are mistakes in titling the vehicle or the finance contract. Errors in either of these documents may have made the repossession unlawful, in which case, you should be able to recover your vehicle, and be compensated for your damages.
Did the repossession agent breach the peace when repossessing your vehicle? Repossession agents must not breach the peace when repossessing your vehicle. If a breach of the peace occurs, the lender loses its right to lawfully repossess your vehicle at that time. In breach of the peace instances, you may be entitled to the return of your vehicle and damages. Under the Uniform Commercial Code, a breach of the peace violation entitles you to damages in the amount of 10% of the vehicle's value and all of the finance charges paid on the account.
The following are what repossession companies are not allowed to do when repossessing your vehicle:
- threaten you or your family with physical violence or arrest during the repossession;
- touch or harm anyone;
- repossess the vehicle after you have instructed the repossession agent not to;
- enter a closed or locked garage;
- break any lock or gate;
- have the police present unless the finance company has a judgment against you; or
- enter your home
If the repossession was legal, in California, you have the right to redeem the vehicle contract and/or you may have the right to reinstate the contract. Redeeming the vehicle contract means that you pay off the entire amount due on the contract before the auction. Reinstating the vehicle contract means that you pay the amount required to bring the finance contract current and the reasonable repossession expenses. If the lender denies you either of these rights, you may have a legal claim against the finance company.
Feel free to contact my office at 800-654-9517 to discuss your repossession situation an experienced Los Angeles Car Repossession Attorney - the call and evaluation of your case is Free.