Legal Advice on Repossession: What You Should Know

Car Repossession Issues Legal Advice on Repossession: What You Should Know

Legal Advice on Repossession: What You Should Know

If you are a property owner, tenant, or homeowner having problems keeping up with property repayment, you might be faced with the danger of repossession or eviction. Eviction or property repossession is a trying event, and you should be prepared for the occurrence.

You can’t be ready for eviction or property repossession, but a little understanding of the law will help you cope with the situation. Understanding state laws on repossession at the ground level might be hard. 

DoNotPay breaks down property laws into language and helps you understand the law and know your rights on property repossession. Sign up now and take the first step toward protecting your property.

What Does the American Law Say About Property Repossession?

Most American state laws allow creditors to repossess your property if you default in any of the following ways:

  • Defaulted your lease
  • Late payment on your property loan
  • Defaulted the finance contract on your property

There are no set limits on how many times you have to default on your loan for creditors to repossess your property. You could default once or twice and have your property repossessed. Your creditors are allowed to engage third-party companies such as a property repossession firm or a towing company to help them get the property back.

After repossessing the property, creditors are allowed by the law to resell the property, for an amount equal to, higher or lower than the debt amount, and repay themselves. Creditors might also opt to sue you for defaulting. 

If your creditors sue you for a deficiency judgment and are successful, the repossession will show on your credit report for up to 7 years.

What Is a Breach of Peace?

Property repossession should be a peaceful act. The creditors should alert the local police of a repossession activity before setting out to acquire the property.

If there is a confrontation between you and the creditors or the repossession agent, the police are required to intervene. This confrontation is what is referred to as a breach of peace. You should avoid the following activities during property repossession:

  • Public disturbance
  • Physical violence
  • Making unnecessary and unlawful noise

Is It Illegal to Hide Property Subject to Repossession?

It is illegal to hide your car to defraud your lenders. You may, however, hold your property for a little while and buy yourself time to repay your debt with no legal consequences. 

If you hide your car or deliberately make it hard for your lender to repossess property, they might take an extra step to acquire it; a process called 'replevin'. Replevin is where your lender will seek a court order ordering you to hand back the property. If you disobey the court order, you will be charged with both civil and criminal lawsuits.

You can legally avoid property repossession in any of the following ways:

  1. Make payment arrangements with the lender
  2. Pay the deficient amount
  3. File for bankruptcy
  4. Negotiate a settlement

How to Avoid Property Repossession on Your Own

Repossession has a very big negative impact on your credit score. It is also an occurrence that will taint your social image. You should do one of the following steps to legally avoid property repossession:

Steps to legally avoid property repossessionDetails
Refinance your loanTaking a new loan from a different lender might be a worthy consideration if you are facing repossession threats. You can now use the new loan to pay off your old one and start the repayment process afresh.

Loan refinancing gives you more time to repay your debts and helps you escape negative credit records caused by loan defaulting. You should only refinance your loan if you are confident that you will be able to repay the new loan.

Sell the propertyIf you sell your property before repossession, you might be in a better position to fetch a higher price than what it would fetch at an auction. Reselling the property will help you reset your loan and possibly take care of your other financial problems.
Communicate with Your LenderBefore defaulting on a loan, make sure you contact your lender as soon as you realize you might not be able to keep up with the payment. Communication with your lender might have you discussing a new repayment plan and signing agreements that will stop any repossession plans.
Surrender the PropertySurrendering your property should be the only resort after you have exhausted all the other options. By handing back your property, you protect your credit score from getting as much damage as it would have suffered after a repossession. If your property is worth more than your debt, you might be able to negotiate for a waiver or reduction of your debt by your lenders.

Understand Your Legal Rights in Property Repossession With the Help of DoNotPay

Making sense of legal procedures during critical times is a demanding task. You might find it hard to understand certain aspects concerning property repossession.

DoNotPay can help you fully understand your rights during property repossession. We simplify the whole process of understanding property repression and help you sue your lenders in instances of wrongful repossession.

How DoNotPay Can Help With Property Repossessions

DoNotPay can help you file a demand letter for wrongful repossession using the laws of your state and help you reclaim your vehicle. If the repo was valid, you will have to pay off any balance you owe to reclaim your vehicle. If you can't afford the payments, DoNotPay can help you ask for a payment plan or negotiate the balance you owe.

  1. Search "car repossession" on DoNotPay and select whether your car has been repossessed or is in danger of being repossessed.

     

  2. Enter the state you financed this vehicle in, and let us walk you through your state's repossession laws to see if your car was or is being wrongfully repossessed.

     

  3. If we can make a case for wrongful repossession, DoNotPay will file a demand letter on your behalf to the lender to fight against.

     

And that's it! DoNotPay will make sure your issue gets sent to the right place. We'll upload confirmation documents to your task for you to view, and if the contacts need more information, they will reach out to you personally via email or mail.

Let DoNotPay Help You With Your Long Processes

DoNotPay is the easiest, fastest, and most credible way to learn about property repossession laws and your rights as a debtor. We work with private companies and governments to make long processes short and accessible to you through your phone. Sign up to our website and enjoy services such as the following and more:

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