 |
Car repossessions and creditor repossession practices are common problems for which consumers seek out a consumer protection attorney. In California, the repossession company and creditor must comply with strict repossession laws. Although they need not give notice before a repossession, they must send you a special post repossession notice, which if defective bars their ability to collect any judgment in court. Wage garnishment and other judgment collections can be prevented by a lawyer if the post repossession notice is defective.
My car has been repossessed. What are my rights?
Under California law, the creditor can generally repossess your car without prior notice, even if you are only one day late on your payment. However, you are entitled to "reinstate" the contract by paying the past due monthly payments plus any repossession and storage costs ( unless you leased the car). After paying these amounts, you should get your car back and continue your payments as usual. The creditor must send you a post-repossession notice which itemizes the amounts due, where to pay, and where to get your vehicle back. Or you can call the creditor to get this information. If you leased, you are not entitled to reinstate, but you are entitled to a written notice telling you when and where they will be selling the vehicle. If you cannot afford to reinstate, or you leased, the vehicle will be sold at auction, generally 15 days after you get written notice of the sale. The creditor will apply the proceeds of the sale to your loan balance, and you will owe the rest, which is called a "deficiency balance." Many people are shocked that they owe so much after the auction sale, because they do not realize that the auction prices are wholesale prices. Keep in mind though that most creditors will accept 50% or less of a deficiency balance in full satisfaction of the account. Just get it in writing before paying! You may also have some defenses, such as fraud by the original dealer, or failure to send the post-repossession notice. See explanations below.
Lawsuit by the Creditor. If you have already been sued after repossession, do not ignore the lawsuit! Seek out a consumer attorney immediately, well before the 30 day deadline to answer the complaint passes, or you might lose your legal rights. If a default judgment has already been entered against you (it has for sure if there is a wage garnishment), act fast to have a lawyer try to set it aside, because the longer you wait, the less likely the court will allow you to start over. Don't assume you have no defenses -- you do not know this until you consult a lawyer. You are usually entitled to attorneys fees if you prevail, under California law.
Post-Repossession Notice: Under California law, the creditor must send you and any co-signers a special post repossession notice. The post repossession notice tells you about your right to reinstate the loan, and must contain nine special disclosures. You should have an attorney review the post repossession notice if you have been sued or contacted by a collection agency. If the post repossession notice was never sent, or if it does not contain all the required legal disclosures, the creditor may not collect any money from you.
Not in Default: Sometimes creditors wrongfully execute a repossession when the customer is actually current on their payments, or has been promised a grace period before repossession. This is like stealing your car, and you should contact a lawyer.
Breach of the Peace: Taking the vehicle from driveways, open carports, and parking lots at work is generally allowed. But the repossession company may not:
• enter a closed or locked garage, or otherwise break and enter any property
• enter into your house, unless invited
• damage the vehicle during the repossession
• threaten or commit violence, or touch anyone
• threaten you with arrest
• force you to pull over to the side of the road
• have sheriffs or police present unless the creditor has already sued you
When the Creditor Demands Too Much Money: If you purchased your car (i.e. not a lease), the creditor can only demand the past due monthly payments plus repossession and storage costs in order to reinstate the contract. The creditor absolutely cannot demand more than that before returning your car. Some outlaw creditors will demand amounts that are based on the value of your car, or tell you that you must pay more because you are a bad credit risk. If this happens, please contact us immediately.
|
|
