How to Recover From a Car Repossession in 5 Steps

What Is Car Repo?

When you lease a car or take out a loan to buy a car, your lender will typically use your new vehicle as collateral to secure the loan. That means if you miss payments and default on the loan, your lender or leasing company can hire a recovery company to repossess the car (take the vehicle away). Once the car is repossessed, you no longer have a claim on the vehicle. The lender will usually sell the vehicle at auction in order to recover some of the money it loaned you. 

What Happens When Your Car Gets Repossessed?

After your car has been repossessed in Georgia, the lender will notify the debtor that they have 10 days to pay off the loan in full. This includes any associated costs that were added to actually repossess the vehicle. Once that period has ended, the lender will usually sell it through an auction. It is important to note that most of the time, the lender does not receive the full amount that was owed on the vehicle, this could be thousands of dollars less than what you owed on your loan. The difference between what you owed on the loan and what the lender sold it for is called the deficiency amount.  Your lender will expect you to pay the deficiency amount. They can legally sue you for it.

Your Credit report will also suffer in more ways than one. The repossession will show up on your credit report for 7 years and if your creditor sues for a deficiency judgment and is successful, that will also be on your credit report.

It is very important to know that there are ways that Cherney Law Firm can help, before or after all of this happens. We can help with car repossessions, judgment and loan deficiencies, but we cannot help if you don’t reach out and ask us to help.

Voluntary Repossession of a Vehicle in Georgia

Surrendering your car with a volunteer repossession in Georgia is an option if you know that you can no longer afford the payments. It can save you a lot of hassle vs having your car repossessed, such as the legal costs that you would ultimately be responsible for and the actual cost that your lending company pays a repo company to get your car. It also can reduce some stress but besides that there are still negative impacts:

Impact on Credit Report

Handing over your keys will still have a negative impact on your credit report because you will have defaulted on your loan contract with your lender. It is slightly better because it will appear on your credit report as a “voluntary surrender” rather than a “repossession” but it will will stay on your credit report for 7 years.

Deficiency

Even though you have surrendered your car, it does not mean that you do not still owe money on it. After your lender has received your vehicle they will sell it at an auction. If the car does not sell for the amount still owed on your loan, the lender can sue you for the difference, this is called the deficiency amount.

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What kind of notification do I have to receive from my lender before they can repossess my car?

Before a lender can repossess your car, you have to get a notice that follows these requirements:

  • The notice can only be sent 10 days after nonpayment
  • The notice must have this title: “Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act”
  • The notice must give you 21 days from when it was sent to catch up on your payments to avoid repossession. This is called the “default cure” period.
  • The due date must be on the notice
  • The notice must tell you the amount due

If you got notice of default, or nonpayment, three or more times, the lender doesn’t need to provide any more notices before repossessing your vehicle.

Can You Become a Repo Agent?

You can become a repo agent if you have the drive to carry out the tasks that the job entails. Given the obstacles that repo agents often face, you will need to have a strong personality to succeed in this line of work. The main objective is to simply fulfill the orders of the lending banks and do what it takes within the law to seize each outstanding vehicle. The job has its perks, but you can also meet resistance when you go onto properties to reclaim vehicles. Therefore, it helps to be formidable in stature.

As a repo agent, you will need to maintain an emotionally unaffected stance while on the job. You will also need the right equipment to seize vehicles in a variety of different places, including narrow hiding spots.

How can I get my car back?

It might not be easy, but there are several ways you can try to get your car back.

You may be able to buy back the vehicle by paying the full amount you owe, according to the Federal Trade Commission.

That includes catching up on missed payments; reimbursing your lender for the cost of repossessing the car, such as towing and storage fees; and in many cases paying off the entire remaining loan balance.

You could also try to buy back your car at the repossession sale. In some states, your lender must notify you if the car will be sold at a public auction so that you have the option of bidding.

4 ways a repossession could hurt your credit

There are several ways a vehicle repossession can ding your credit.

  1. Late payments — If your car is repossessed because you missed a payment, that late payment could stick around on your credit reports for up to seven years.
  2. Repossession — After your car is repossessed, the credit bureaus may include a note about the repossession in your credit reports for up to seven years.
  3. Collections — If you still owe money on your car loan, the lender might eventually hand over the debt to a collections agency. The collections account could show up on your credit reports for up to seven years, even after you repay the debt.
  4. Court judgments — If you refuse to repay the car loan, either the auto lender or collections agency could take legal action against you.

Keep in mind that each of these derogatory items may represent a separate entry on your credit reports. This means that if the auto lender takes away your car, your credit could suffer several blows from the same incident.

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Personal Property

You probably won’t know exactly when a repossession agent is coming for your car. You might simply walk outside and find that the vehicle is missing. If the timing is a surprise, there’s a good chance that some of your belongings will be in the car (a set of tools in the trunk or clothing in the back seat, for example).

Since those items were not part of the original contract, your lender is typically not entitled to keep them. After repossession, your lender should notify you of how to claim your belongings. But act fast—you might only have 30 days or so.

What about aftermarket parts and upgrades? The devil is always in the details (so read the fine print and check with a local attorney), but it’s probably safe to assume that anything attached to the vehicle will not be returned to you. If you have valuable wheels, suspension, and audio equipment, replace those items with stock parts before your car is repossessed.

Vehicle Repossession Laws

Once the loan or lease is considered to be in default, the lender can typically take the car without notice, even coming onto your property to repossess it. What they can’t do, however, is “breach the peace.” Depending on which state you live in, this could mean that they aren’t allowed to use — or even threaten to use — physical violence to get a vehicle. In some cases it means that they can’t take your vehicle out of a closed garage without permission.  To learn more about the car repo laws in your state, you can consult your State Attorney General or local consumer protection agency.While the car does not technically belong to you and is the property of the lender or leasing company, you do have some basic rights if your car is repossessed. These include:

Your Personal Property

If you have any items of value in the car, such as a laptop or car seat, the bank or leasing company that owns the loan is not allowed to keep or sell the property found inside the car.In some states, a creditor must tell you what items were found in the car and how you can get them back.If you’re having trouble retrieving personal items that are of significant value, you might want to file a consumer complaint or talk to an attorney about how to get your belongings back or if you can be compensated for them.

Selling Price

The lender might sell the repossessed vehicle directly to the public to quickly get their money back from the loan. Or they might sell it at a vehicle auction.The lender doesn’t have to sell it for the highest possible price, but they are legally required to make an effort to get fair market value for the car and to sell it for a “commercially reasonable” price.The reason is that the sales proceeds will go toward paying off your debt. It would be unfair to repossess a vehicle and then give it away for very little to somebody else.

How Can You Avoid Getting Your Car Repossessed?

If you’re behind on your loan payments, the best thing to do is to communicate with your lender. Your lender might be able to offer you a solution such as a reduction in payment amount or interest rate that can help you catch up on your payments and avoid repossession. (Learn more about options to avoid a car repossession.)

How Does a Repo Man Find a Car?

You may be wondering how to stop a repo man from taking your car? Hiding your car so the repo man cannot easily find it may seem like an option, but this is only a temporary fix to an ongoing problem, and repossession agents have worked through every trick in the book. So how do repo companies find your car if you make it unavailable? There are numerous ways, starting with scans of all the places you are likely to be during a given day, and most agents cast a wide net.

The search begins at a home address, which the lender provides to the repo agent. The easiest repossessions occur in cases where the vehicle is left in plain sight, such as when you park your car on the street or in the driveway in front of your home. The moment you walk inside your house and close the door, the repo agent could sweep in and claim the vehicle.

For the trickier subjects, the repo agent will take matters up a notch and survey the streets around the neighborhood. A common trick among delinquent parties is to park a vehicle a few blocks from home, making it accessible when needed but farther away than where one might expect a repo agent to look. However, repo agents have gotten wise to this trick and routinely scan streets for at least three blocks within the radius of a subject’s address. Many vehicles have been repossessed at this presumed safe distance.

A repo agent will also scan parking lots in or around your place of work — which the agent can find based on the info from the lender — and any supermarkets near your house. If you keep your car parked inside your garage at night yet leave it parked in plain sight as you head into the office, you could find your car gone one day as you prepare to head home for the evening.

A repo agent might also survey your house and wait for you to pull out of your garage. The agent will then follow you to wherever you might be heading, be it the grocery store or out to a restaurant. Once you park the car and head into the store or eatery, the repo agent will then be able to retrieve the vehicle.

These days, repo agents have towing equipment that makes it easier than ever to extract vehicles within a minute or less, even from tight spots. Therefore, you could have your car repossessed at a gas station as you break for the bathroom or go inside the convenience store to pay for gas.

The most aggressive way for a delinquent party to avoid repossession is to keep a car locked inside a garage at all times. Laws vary state-to-state regarding the actions a repo agent can take to get around this obstacle. In some states, a repo agent could get a duplicate key to your garage and enter when you are away or inside your home. If you typically leave your garage door unlocked, your vehicle could be a sitting duck. However, these actions are not legal in all states, as some states interpret garage-entry as “disrupting the peace.”

For hidden cars and even for some vehicles parked

For hidden cars and even for some vehicles parked at great distances from a subject’s typical haunts, a repo agent might use an electronic detector to track down a vehicle for repossession. These days, many lenders require that all new vehicles be equipped with such devices. As long as a car remains on the lot or under a payment plan, the tracking mechanisms must be active in the immediate location in case of theft or a subject falling delinquent on their payments.

It must be stressed that the law forbids delinquent parties from intentionally avoiding repossession and obscuring a vehicle from repo agents. However, it can be difficult for courts to prove such intent. Subjects are usually found guilty if they suddenly start keeping a vehicle at a relative’s house or some far-off free parking spot. For example, if a repo agent first surveys you driving out of your garage and misses the opportunity that day, but finds you walking to the bus stop on subsequent days, you could be charged with hiding the car if it is repossessed weeks later at your parent’s house.

How Do Car Repossessions Work?

In most states, car lenders can seize your vehicle without prior notice if you’re in default. However, they can’t breach the peace while they do it. Breaching the peace usually means using or threatening to use physical force against you to take the car back. But it can also simply involve repossessing the car from your closed garage. If your lender commits a breach of the peace, you might be entitled to damages or use it to defend against a deficiency lawsuit (discussed in more detail below). (Learn more about how motor vehicles are repossessed.)

What To Do When You’re Worried About Car Repossession

If you think that you’re going to have trouble keeping up with upcoming car payments, you should contact your lender to discuss your options. Your lender might agree to create a new payment plan, defer payments, or refinance the loan so that you don’t miss any payments and risk repossession. You can also consider selling your car to pay off the debt and avoid repossession costs.

Bankruptcy could also be an option if you’re worried about missing car payments. If you file for bankruptcy, you’ll still owe whatever the car is worth, but this action will stop your car from being repossessed. Bankruptcy will also give you more freedom from other debts so you can focus on your car payments.

Whatever you decide to do, you shouldn’t miss payments without first contacting the lender. You also shouldn’t try to hide the car from the repo man because doing so will only increase the amount of debt you owe. Before your car is repossessed, upcoming loan payments add to the loan balance and interest continues to increase the total amount owed.

Can you get a car loan after repossession?

It's possible to get a loan after your car has been repossessed, but it will be more difficult and you'll likely pay higher interest rates. If you need a new loan before your credit has improved, consider asking someone with better credit to co-sign with you.

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