Fun Facts About Automobile Repossession
Hollywood movies tend to treat car repossession with comic flair. Emilio Estevez and Harry Dean Stanton starred in the quirky 1980s cult classic Repo Man and Bill Murray gets his car repo’d in Stripes before his girlfriend dumps him and he joins the Army. There’s something darkly humorous about having a car snatched for non-payment, unless it happens to you. Here are some fun and not-so-fun facts about automobile repossession you may find helpful.
Fear the Repo
In Florida, a creditor can generally take a vehicle the moment you default on the payments. They do not need to take you to court or provide advanced notice. What constitutes default is a matter between you and the lender. The terms should be expressly outlined in your contract. If they agree to take late payments with a penalty that are different from the agreement, that document may lose its force. Be sure to get everything in writing because side handshake deals are hard to prove and courts may decline to consider them. Rest assured that once your vehicle is in default, the repo man is coming and he’s not a Hollywood actor.
How to Repo the Repo Man
If a creditor grabs your automobile to offset a loan, you may be entitled to recoup some or all the equity. Just because you weren’t able to continue making payments doesn’t give the lender free and clear ownership of the vehicle. In Florida, they can either keep or resell the vehicle as compensation for the outstanding debt. The creditor is required to notify you about the car’s fate. If they try to keep it without paying you for the equity, you have the right to force a sale. If the vehicle goes to public auction or is sold to a private party, the difference between the sale price and what you are owed should end up in your bank account. If the car hasn’t been sold off and you enjoy an unexpected windfall, you have the right to buy back the car by paying the full amount owed, plus expenses. Basically, you’d be repo-ing the repo man.
Thwarting the Repo Man
One of the few weapons that debtors have to stop physical repossession is Florida’s “breach of peace” statute. Most repossessions take place when you’re not around. The lender may furnish the company with a set of keys or they’ll back a tow truck up and haul it away. But if you or a family member object loudly, they’ll likely have to stop. They also are barred from using physical force or threats to get control of the property. A breach of peace violation opens them up to civil lawsuits and they could end up paying you more than the car’s value in the end.
Court Matters Beyond Repossession
Once a vehicle has been seized and sold, the proceeds are applied to the outstanding loan. The creditor must follow a reasonable and reputable sales method. Florida courts calls this a “commercially reasonable manner.” The creditor also can subtract any expenses they incurred during the process. These can include repossession costs, travel, legal fees, etc. If the sale falls short of paying everything off, the creditor could seek a “deficiency judgement” against you, provided the loan was for more than $2,000. A hearing will be scheduled and you would be wise to have an attorney present any legal defenses. These may include the creditor selling the vehicle far below book value or breach of peace, among others. A creditor could forfeit the right to a deficiency judgement due to breach of peace. An unethical sale may entitle you to equity compensation.
Good Faith Policies
It can be much easier to discuss alternative payment options with a lender than going down the default road. They understand that people fall ill, get laid off from jobs and have real life financial problems. Working out a lower monthly bill over a longer period of time may be a reasonable solution. Keep in mind, the repossession process is a hardship for both parties. You need a car and the creditor needs a positive cash flow.
Voluntary repossession may also be an option. You can work out an agreement with the creditor to surrender the automobile that includes waving late fees and potentially gaining you more of the equity into the car. Business people generally look for the most cost-effective solution. As members of any community, a show of good faith and honest attempt to resolve a problem often has tremendous value.
If you find yourself in financial straits, it’s important to work with an experienced attorney in matters such as automobile repossession. Make sure you are properly represented by contacting the professionals at Yardley Law.