Can You Sue a Credit Union for Repossessing a Vehicle Without Notice?
You may not have legal grounds in your state for suing a credit union for repossessing your car without warning. However, people who face repossession do have some legal protections, and there are circumstances under which you should receive advance notice about the status of your repossessed vehicle.
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State Laws
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Many states allow lenders to repossess a vehicle as soon as a borrower fails to make a timely payment on a loan, according to the U.S. Federal Trade Commission. States generally allow a credit union, or any auto lender, to repossess a vehicle without giving advance notice to the vehicle owner. Repossession companies that work for auto lenders can remove a vehicle from an owner's property. However, state laws forbid repossessing agents from using threats or force to take a vehicle, and they usually can't remove a vehicle from a closed or locked garage without the owner's permission. Your state attorney general's office or local consumer protection agency would have specific information on repossession laws in your state.
Violations
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A credit union could have to compensate you in other ways, even though you generally can't sue over a repossession that takes place without notice. For instance, a credit union or its repossessing agent could be required to pay a penalty for using force to take a vehicle. Furthermore, the credit union may not keep or sell any personal property that's inside a vehicle at the time of repossession. The credit union or the repossessing agent must tell you what personal items were inside your car and give you instructions on how to retrieve them.
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Sale Notice
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Some states require auto lenders to give vehicle owners advance notice concerning what's going to happen to their repossessed vehicle. For instance, a credit union that intends to sell your vehicle at an auction may have to give you the time and place for the auction and allow you to bid on the vehicle if you want. Your state also may require a credit union to give you the date of a private sale that's set to sell your vehicle.
Considerations
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Consider that repossession companies may have significant leeway concerning how their agents take a vehicle. Some may use tow trucks to haul away a car; others may have a spare key that allows them to drive off with your vehicle. The Nolo law information site indicates that a repossession agent may even hot-wire your vehicle to take it. Hot-wiring allows a person to start a car engine without a key by short-circuiting the vehicle's ignition system.
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