Repossession is the legal right of a creditor to reclaim property after a debtor has failed to pay a loan secured by that property. With respect to automobiles, if you fail to pay your car loan, the bank or other financial lender can repossess the vehicle. In Georgia, a creditor can repossess as soon as you are delinquent unless the loan contract says otherwise.
Creditor's Repossession Rights
Unless the loan contract expressly says otherwise, the financial institution can repossess the vehicle as soon as you default on the loan. Typically, most lenders won't repossess immediately but rather will send a warning letter and only repossess if the default remains for an extended period of time. However, this is just a courtesy -- the dealer is not obligated to grant extra time to pay.
Debtor's Repossession Rights
Although a creditor has the right to repossess your vehicle, the manner in which the creditor goes about doing it is limited. Georgia law requires creditors to repossess the car without illegal force, breaching the peace or trespassing. For example, a creditor cannot remove the vehicle from your closed garage without your consent. Additionally, if a creditor causes damage to personal property during the process of the repossession, the creditor may be liable for the damage. Creditors also do not have rights to the personal property that is inside the vehicle during the time of repossession. For example, if the car is repossessed before you have a chance to remove your belongings, the creditor must return them to you. If they are lost or damaged, Georgia law requires that creditor cover the replacement and repair costs for those items.
Right to Redeem
After the vehicle has been repossessed, Georgia law gives the debtor the absolute right to redeem the car before it is sold at auction by the lender to help satisfy the debt. To redeem the repossessed vehicle, you must become current on the balance owed, plus pay and fees associated with the repossession of the vehicle.
If debtor has paid 60 percent or more of the price of the car, the lender is required to sell the car at auction to help satisfy the debt still owed. Georgia law requires the compulsory sale take place within 90 days from repossession.