A Car Owner’s Rights During Repossession
Having a car loan can sometimes be stressful but necessary, especially if someone needs a reliable car to go to work, grocery shopping, doctor’s visits, school or other necessities, in an area without consistent public transportation. If the car owner cannot make the monthly payments, he can lose the car in repossession by the loan provider. Repossession can cause confusion and interrupt a person’s life. It is therefore important for a car owner to know his rights during repossession.
Repossession is a method of debt collection, and if a car owner has missed payments, his car can be repossessed by the loan provider, usually through a third party repossession agency. Repossession is generally possible because a lien is placed on the car to secure the loan.
However, even though the lien holder has a right to repossess the car for non-payment, Pennsylvania law restricts what kind of action can be taken during repossession. The person attempting to repossess a car has to do so without breaking the law or breach the peace. This means for example, that the person cannot break into the car owner’s garage or other locked area to repossess a car parked in there.
If the car owner is present when the repossession is attempted, and refuses to let the repossession agent take the car, the repossession should not legally take place. In a situation such as this, the repossession agent has to get a court order and return to finish the repossession at a later date. However, repossession can be legal even if the car contains the car owner’s personal property which is also inadvertently taken when the car is repossessed.
After repossession, the lien holder can sell the repossessed car in order to recoup the money owed on the loan. If the car owner wants to get the car back, he can do so within fifteen days of getting notice of when the sale is to be held. Usually, in order to get the car back, the car owner has to come up with a lump sum of the missed payments, and sometimes the balance of the loan owed. The lien holder has a duty to sell the car at a reasonable price, and to advertise well enough to ensure a good sale.
If the lien holder does not get the total owed on the loan after the sale, it can seek a deficiency judgement against the car owner if there is nothing in the loan agreement limiting deficiency judgement. A deficiency judgment allows the entity who is owed money under the loan to collect the balance of the loan owed after money from the sale of the repossessed car has been applied. On the other hand, if the car sells for more than the loan owed, the car owner should get that surplus.
Contact an Experienced Debt Collection Attorney
If you are having financial problems and are afraid of getting your car repossessed, you can try to negotiate with your loan provider to make your payments easier to manage. If the loan provider or another debt collector has engaged in harassing behavior when trying to collect the money owed, including engaging in illegal repossession, you do not have to take the abuse any longer. Contact Louis S. Schwartz and his team at ConsumerLaw Pa.com to speak to an experienced debt collection abuse attorney in Philadelphia.