How to Exercise Car Repossession Rights


When your car is repossessed, that is not the end of the story. You have rights that you can exercise by law. Make sure you are informed of these rights when dealing with a repossessed car.

  • Work with the creditor to accept late payments or even change your payment date. You can do this in writing or orally, or by the creditor taking your payments without complaint, even if they aren't made on the date according to the original agreement. However, if you default on this agreement, the creditor is within its rights to repossess your car.

  • Exercise your rights when a "breach of peace" is committed when your car is taken despite your protests, removed from your locked garage without your consent, or if your property is harmed in the course of repossessing your car. If a breach of peace happens, be sure to report it. Depending on the laws in your state, the creditor may have to compensate you or even lose any rights to collect the difference between the proceeds from the sale of your car by the creditor, and what remains of your debt. Be sure to contact a lawyer to report any breech of peace.

  • Make sure you know what happens to your car after it's repossessed. By law, the creditor must tell you what they are going to do with it, whether they will sell it privately or in a public sale. If the creditor wishes to keep the car, you can demand that the car be sold, especially if it is worth more than what remains of your payments.

  • Be sure the creditor informs you if they intend to sell the car at a public auction, for it's within your rights to be present and bid on the car should you wish. You should also be informed if the car is to be sold privately, so that if you wish, you can pay what you owe as well as the costs incurred by the repossession company when they repossessed your car. Your state consumer protection office can help you find out what laws apply in your state in this matter.

  • Investigate to find out whether the creditor intends to sell the car in a "commercially reasonable manner." The sale should represent a fair market value. If the sale is below or even well below fair market value, you could submit a claim for damages against your creditor, or have a "defense against a deficiency judgment."

  • Collect your possessions from the car after it's been repossessed. The creditor may not keep your possessions or sell them, as long as the possessions do not include a stereo or a hitch. If the creditor does not return your possessions, you have the right to go to an attorney and demand compensation.

  • Attend the trial should the creditor decide to sue you for the deficiency, which is the difference between what you owe and what the creditor is able to get when they sell the car. If there was a breech of peace when the car was repossessed, this would be a great opportunity to make the court aware of what happened. In this manner, you could have a defense against the deficiency the creditor is demanding you pay. Make sure you have an attorney present.

  • Notify the authorities if your car is repossessed after you declare bankruptcy. Bankruptcy means that the debtor is protected and any efforts to repossess your car would violate an "automatic stay" on your, or anyone who declares bankruptcy, debts. Write to the Consumer Response Center should you have any complaints against the creditor. You can also file suit or contact your state attorney general.

  • Look over the information regarding the repossession on your credit report. If there are any inconsistencies, you can report them and have them removed from your credit report.

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