involuntary repossession

What Is An Involuntary Repossession?

Involuntary Repossession – When a person not only fails to connect to the court but also fails to communicate with anyone at the court or to get posted warnings then involuntary repossession occurs. If someone does not clear its payment above two-month then anyone from the credit institute comes and repossesses the vehicle without any single word.

But if we talk about the property the procedure is long and complex it depends upon the debt of the person. Another thing is that either the person is allowed to sell the property or wait until the respected institution put it on auction.

But the bad news is that even if your property is sold out it does not make the debt canceled, instead, it just cuts the amount that you have to pay, and the remaining amount is still there to be paid. The situation gets worse if there is also an interest in it.

Repossession of vehicle:

If anyone lost its vehicle in an involuntary repossession, he or she must know it’s right and what to do then. Below is given a guide for what to do in this situation. This can vary in different states to the extent your state allows.

Security agreement

The car can be repossessed as collateral only by the person or institute who lends the car. None of the other institutes can repossess it for their loans until you have signed an agreement in which you gave the car as collateral. While buying a car on loan you sign a security agreement. You can say that if the parents buy the car on loan for the daughter and it is on her name, but she did not sign the security agreement then the company cannot repossess the car. So, it is very important to check the security agreement to avoid mistakes. You should take a copy of the agreement at the time of buying a car and even if you don’t have it, ask it from the creditor. You don’t have the legal right of asking another copy of the agreement so for that, you have to contact a local attorney.

Where is the Default?

If your vehicle is going to be repossessed it is not necessary, that you default on your loan. There are many other ways where you can default. It can be that you are failed to purchase insurance, losing or destroying the car, the selling of car or taking it out of the city without lenders’ permission. To check that you have to take a look at your security agreement. Because there are times when you are on default but still your vehicle can not be repossessed.

Loan accelerate Clause:

Say in the condition that you are on default by not paying the loan. The lender can ask you to pay the past due amount or to pay the complete amount or repossess the vehicle. At this time check the security agreement that either it has the loan acceleration clause if not he cannot ask to pay the complete amount.

Notice of acceleration and the right to cure:

In the agreement, the lender may not have to tell you about the acceleration or repossess. But most of the time it has the clause of notifying you about the acceleration of amount and repossession. So, if there is such clause the creditor must have to inform you about the acceleration of amount and repossession. Even after the notice, you can get help from the state named “right to cure”.

Self-help repossession:

If you have defaulted on a loan and it also accelerates then there are chances of an involuntary repossession. In many cases, lenders can seize a vehicle even without going to court. It is known as self-help repossession. However, there are some state requirements that can save you from self-help repossession which are given below

Express consent – There are some states which do not allow this type of repossession without your consent that is a signed written agreement.

Military personnel or dependents Federal Soldiers’ and Sailors’ Civil Relief Act can save you if you are in the military or its dependency. But this also relieves temporary or partial.

Native Americans: – These can be protected by tribal law.

Breach of peace:

The lender cannot breach the peace while repossessing the vehicle. The following factors come under the breach of peace

  • Pushing you
  • Damaging your property
  • Lying or tricking you
  • Threatening you
  • Presence of police
  • Ignoring your objection
  • Entering closed garage

So, if your lender breaches the peace then based on the laws of the state necessary steps will be taken by the court.

Properly dispose of the car:

involuntary repossession

There are six possible ways in which the lender can dispose of the vehicle.

  • Reinstatement
  • Redemption
  • Strict Foreclosure
  • Judicial sale
  • Consumer sale
  • Creditor sale

Notice of the creditor sale:

The creditor or lender must inform you before selling the car and if not, you can stop it. But if you get the notice you have to act before the date of sale and try to redeem your vehicle.

Above given are some ways so stop the involuntary repossession and the main thing which we get to know is that before buying anything whether it is a vehicle or any sort of property one must take care of security agreement and must know about laws and regulation so that he or she can avoid problems in the future.