Can You Stop Your Car From Being Repossessed?

Once you default on your car payments, your creditor has the legal right to repossess your car. Your loan contract typically lists the legal rights that your creditor retains on your car until you make your last payment. Repossession can usually take place without going to court and without warning.

At Ammerman & Goldberg "Bankruptcy" Law Office, our Washington, D.C., car repossession lawyers represent consumers throughout the region, including Virginia and Maryland, who are either facing car repossession or have already had their vehicle repossessed after filing for bankruptcy. Since filing for bankruptcy places an automatic stay against repossession, if you have filed for bankruptcy, your creditors may be in violation of the law if they repossessed your car.

Why Do Creditors 'Repo' Cars?

Creditors typically repossess cars when seizing the vehicle will allow them to resell it and eliminate a portion of the debt owed to them. While a creditor can keep a car and hold it until you pay it off, most prefer to sell. State law requires that you be notified by the creditors regarding their intention to sell or keep the vehicle. Of course, you can request that a creditor sell the car.

If the automobile is sold at auction, you must be notified, and you have the right to participate in the bidding process. If it is sold privately, you must be notified beforehand, affording you an opportunity to pay off the car and any storage or repossession charges incurred. A creditor is required to ask a fair price for a car.

Your Rights In Car Repossessions

While creditors have certain claims against a vehicle, car owners have certain legal rights and protections as well. If, for instance, you reached an agreement with your creditor that changed the terms of your loan or the due date of its payment, then the contract terms governing your loan may no longer apply. If your creditor regularly accepts late payments without penalizing you or demanding that you pay on time, their silence on the matter may be construed as a change in the original contract terms. Seizing your car under these circumstances — or selling it without properly notifying you — is a violation of your rights. You may be able to sue your creditor for damages.

After Your Car Is Sold

If your car is sold, your creditor may attempt to sue you for the difference between what you owed on the car and what it was sold for. If, for example, you owed $5,000 on the loan and the car was sold for $3,000, your creditor may ask you to pay the $2,000 difference. If your creditor sues you, you will be notified of a hearing date. Appearing with an attorney who can show any evidence of wrongdoing on the part of your creditor is important: You may be able to convince the court to dismiss the deficiency judgment against you.

Bankruptcy — Preventing Repossession

If you file for bankruptcy under Chapter 13, you can restructure your debt according to a plan agreeable to your creditors. This will allow you to make payments on your car according to terms you find more manageable. Filing bankruptcy also places an automatic stay on repossession, preventing your creditor from seizing your vehicle.

To learn more about your debt relief options, please call (301) 655-0606 for a free telephone consultation or contact our Maryland debt relief attorneys by filling out our online form.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.