Six Questions You Need to Ask if Your Car is Being Repossessed

Nearly six million American will have their vehicle repossessed in 2017. Last year over twenty-six percent of all auto loans nationwide were subprime or "deep subprime." These loans carry very high interest rates that reach upwards to 25%. Unfortunately, many of these loans will end in repossession.

If you’re facing repossession, don’t assume that will be the end of your problems. In fact, debt collectors can force you to pay thousands more on a car you no longer own.

Dani Liblang, principal of the Liblang Law Firm in Birmingham says, “Most borrowers don’t believe they can afford an attorney, and they don’t appear in court to defend themselves against the collections lawsuits. That allows lenders and collections companies to garnish their wages, seize bank assets, and place a lien on their home.”

Most borrowers don't believe they can afford an attorney, and they don't appear in court to defend themselves against the collections lawsuits. That allows lenders and collections companies to garnish their wages, seize bank assets, and place a lien on their home

Dani Liblang, Founder The Liblang Law Firm P.C.

Liblang emphasizes that you do have legal rights in the repossession process and if they are violated, can provide grounds for the recovery of your vehicle, waiver of any deficiency claim against you and allow you to recover money damages, including costs and attorney fees. Don’t be afraid to defend yourself against big loan companies and their lawyers.  In reality, debt collections attorneys are counting on your feeling of helplessness. They file so many cases they couldn’t possibly take them all through trial. Errors or technical details get overlooked when borrowers represent themselves. However, when pressed, many collections companies simply cannot prove their cases.  

Ask yourself the following questions.  Do any of these apply to your situation?

Did the lender notify you that the loan was in default, or that the vehicle will be for sale? One of the most important areas of repossession law is the notifications that are due the vehicle owner and any co-signer. If the lender breaks any repossession laws, you may have expanded rights to recover your car.

Was your vehicle repossessed before the loan was technically in default? Auto loan payments have specific due dates. If the contract specifies a grace period or the lender has repeatedly accepted late payments, the lender must notify you of its intent to strictly enforce the due dates before attempting to repossess your vehicle.

Did a “Breach the Peace” occur? If there was a breach of peace, you may have additional rights to recover your losses. When a creditor repossesses a car, they must do so in a peaceful manner. Should a lender engage in aggressive or threatening behaviors, or enter your garage without your permission, or take the vehicle over your objection, their actions may constitute a breach of peace.

Did you recover your personal belongings? You have a right to recover your personal belongings out of the car when your vehicle is being repossessed. You must be able to either get your personal things out before the car is taken, or be notified of how to obtain them. The failure to allow you to recover your personal property without charge is illegal and may entitle you to damages for conversion. Michigan’s conversion statute allows for recovery of three times the value of the property taken, plus your costs and attorney fees.

Are you an active member of the military? Under the Federal Service members Civil Relief Act, lenders must get a court order to repossess the vehicle of an active service member. Active duty military personnel may have additional protections to prevent car repossession.

Was there a change to your loan contract? If your creditor has ever made a change to your original loan, such as accepting a late payment or changing a payment date for you, your contract terms may no longer be valid. Small changes to the original contract can affect the validity of the entire document.

Even if none of these scenarios apply to your situation, it is always better to appear in court with representation. A collections defense attorney can use those errors, legal defenses and even counter-claims for consumer protection violations to save you money. Your legal fees and costs can even be covered in some cases. Even when there is no clear legal defense, having a lawyer on your side makes it more likely that you will get a settlement that you can afford, rather than a judgment that you will be paying on for years to come.

Dani K. Liblang of The Liblang Law Firm, PC, in Birmingham, Michigan, has been defending collections cases for over 30 years. She can help you get out from under the debt created by subprime lending and desperate situations. Contact The Liblang Law Firm, PC, today for a free consultation.

Source: Curtis & Associates