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Vehicle Repossessions: Overview of Your Rights

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We periodically get inquiries from potential clients asking about their rights after their vehicle get repossessed (repo’d).  This post generally summarizes your legal rights when your car is seized in  a repossession.

The first question that arises is whether your finance company even has the right to repo the vehicle.  Generally, the lender can repossess the vehicle if you are in default.  Default occurs when you have violated certain important terms of your financing contract.  Default can occur not only when you fall behind on payments, but can also occur for other reasons.  Many contracts also define default as having occurred when the vehicle is damaged and not repaired, when the insurance on the vehicle lapses, when the vehicle is impounded, and if you file for bankruptcy.  Your contract may also have additional or different definitions for what triggers a “default”.

Some consumers believe that turning in a vehicle voluntarily means that it was never repossessed.  Unfortunately, even a voluntary surrender of the vehicle is usually classified as a repo.  However, there may be certain advantages to a voluntary repo: you can avoid towing charges and certain other fees that the finance company ordinarily tries to recover later, and you may be able to control when and where the vehicle is turned in.  That way, you do not have to worry about your personal belongings that were left in the vehicle at the time of the repo, since they often mysteriously “disappear” during a night-time repo.

Contrary to what is sometimes shown on television, the repo man (or repo woman) cannot repossess your vehicle if it would involve a “breach of the peace“.  Obviously, injuring you physically qualifies as a breach of the peace.  However, other circumstances can also create a breach of the peace, such as breaking into your garage, damaging your fence or gate to get access to the vehicle, and even threats of bodily harm.  Remember, the lender or finance company who hired the repo man is usually responsible for all of their actions during the repossession.

Ordinarily, you will receive at least one (and possibly many more) notices of default before your vehicle is repossessed.  However, you are also entitled to receive additional notices.  For example, you are entitled to receive notice of when, where and how your reposssessed vehicle will be sold.  After the sale, you are entitled to an accounting.  This means that the lender must itemize how much you owed before the sale, how much they received for the sale, an itemization of the fees and costs associated with the sale, and the amount you still owe following all that.  This is normally referred to as the post-sale notice of deficiency.

If the finance company files a lawsuit in Florida seeking to recover for a deficiency, they have to comply with all the applicable Florida laws and court rules for a debt collection action.  They also have to comply with the laws that contain additional safeguards for the consumer.  For example, if properly challenged, they must prove that every aspect of the sale of your repossessed vehicle was “commercially reasonable“.  This may be difficult for the lender to prove if they do not bring the correct witnesses and documents to the trial.

Unfortunately, we know of numerous instances where the lender or the repo agent failed to follow Florida law in repossessing the vehicle, and then later when suing on a deficiency.

You can help protect your rights by keeping copies of all documents you receive relating to the vehicle and its repossession.  It is also important to save all the envelopes used to mail you your notices.  Finally, keep detailed notes about all aspects of the repossession, including every person you spoke with, and the date and time of those conversations.