David R. Black Bankruptcy Law Blog on Lawyers.com

My Vehicle Was Repossessed! What Are My Options?

Wednesday, September 14, 2011 by David R. Black

People rely on their cars to drive to work, school, and shopping. They need to get the kids to soccer and run errands. But what if they can no longer afford to make their scheduled car payments on time?

The answer is, their creditor or lessor could come to their home and seize their car, truck, or motorcycle. Known as vehicle repossession, creditors can usually take back the car at any time, without advance warning, if the loan is in default. However, in most states, they must repossess the vehicle without committing a breach of the peace, which includes physical force, threats, or property damage.

If the creditor turns around and sells the repossessed vehicle but does not make enough money to cover the outstanding loan balance, the debtor may owe the deficit (or difference) plus fees related to the repossession, storage, or sale. The loan default may also mar their credit report and lower their credit score, which makes it more difficult to finance a new vehicle.

Legal options following vehicle repossession

So what options does a debtor have following a repo? First, if the creditor committed a breach of the peace while seizing the vehicle, the company may forfeit their creditor rights, owe a penalty fee, or need to compensate the debtor for harm or damage to their property. If the creditor does not resell the car in a commercially reasonable manner, this may enable the debtor to file a claim for damages or a defense against any deficiency judgment.

While debtors do have legal options in the wake of vehicle repossession, the best course of action is to prevent the repossession from happening altogether by contacting the creditor at the first sign of financial trouble. Perhaps the creditor would be willing to renegotiate the loan terms or a third party lender could refinance the vehicle with more favorable terms.

Vehicle owners in distress can sell their vehicles, trade them in for something less expensive, or transfer the leases. A bankruptcy lawyer can explain both federal and state laws governing vehicle repossession, and recommend legal actions to rectify the situation or obtain compensation for any losses.

Contact us today

If your vehicle was repossessed in the Media, Pennsylvania area, and you need the help of a bankruptcy attorney in Delaware County, please call the David R. Black’s Bankruptcy Legal Group at (484) 842-4201 or contact us to schedule a free consultation today.

David R. Black, Esq.

327 West Front Street
Media, PA 19063
(610) 566-8500

Posted at 17:26 PM

Topic: Bankruptcy