by Steven A. Williams, President & Founder – TheCreditRepairShop.com
“Breach of the Peace” – this is a legal term that can help you keep your car during a repossession if you are able to get a law enforcement officer there before they take your car.
The “Repo Man” is not able to:
- Use bodily force or threats. Physical contact is prohibited.
- Can seize the car from the street of even a driveway, but cannot break open a locked garage door to get at a car.
- Cannot take property over the debtor’s oral objections. Eventhough we see this happen over and over again.
- Cannot be accompanied by a government official, such as the police, unless the official has a court order.
- Courts are divided over whether a repossessor can use trickery to seize the car, such as agreeing to make free repairs as a pretext for seizing the car.
- The repossessor cannot give you legal advice, regardless of what they say. Sometimes they try doing this to get you to calm down.
- If you are there you can request the legal documents from the lender, their license to tow vehicles and their ID.
Because lenders understand when they repo a vehicle they are going to sell the car at a lose, there could still be time to work out a deal to keep your car and get your loan back in order.
Strategy #1 – before you get behind on your payments ask for a 3 to 6 month payment deferral. This is where your lender will approve you to miss payments and they will put the interest and missed payment on the back of your loan. Ask for the hardship department and let them know your situation.
Strategy #2 – if you are already behind on your payments you can ask if there is any way to still get a payment deferment for the payments you’ve missed and that you would start making the remaining payments on time. Sometime’s they might want you to make a “Good Faith” payment to show you are serious about paying the loan.
Strategy #3 – Sell the car and pay the difference to the lender. When doing this you should ask the dealer can you sell the car for an agreed amount and if you can get it they will consider the car paid in full.
Strategy #4 – Give the car back to the lender and negotiate the remaining balance of the vehicle after it sells at the auction.
IMPORTANT THINGS TO CHECK ON YOUR LOAN DOCUMENTS:
- Make sure your lender/auto dealer didn’t make you sign up for loan default insurance. If you were a high credit risk some dealers slip in this insurance to pay off the car if the loan goes bad.