Your vehicle represents freedom. It affords you the ability to work, visit family, attend a school or even just go for a leisurely drive. A car or truck is absolutely necessary for many who have to travel to their job. Having your vehicle repossessed can steal your ability to get everyday tasks done and ruin your credit score. Unfortunately, just one delinquent or missed loan payment can result in the repossession of your vehicle.

This article will discuss the options Florida residents have in regard to repossession. The goal is to manage your car loan and ensure that your car is safe from the repo man.   

The Repossession Process

Florida Title 33, Section 537.012 is the statute of the law that governs vehicle repossessions. There are other consumer and contract laws that may apply. The critical thing to remember is that a vehicle loan contract typically permits repossession after only one missed loan payment!

How Car Loans Work

A car loan is a secured loan. In other words, the loan is “secured” by collateral – your vehicle. A secured loan gives your lender the right to take your car if you don’t make full, on-time payments. 

When borrowers sign a contract for a vehicle loan, they promise to make timely payments. The agreement states that the lender can repossess the vehicle if those payments aren’t made. Therefore, with their signature, the borrower agrees to those terms. 

The Florida Department of Agricultural and Consumer Services monitors and regulates “recovery agents” who are designated to repossess your vehicle. Recovery agents are required to be licensed in the state of Florida and are governed by the Florida Statutes and Florida Administrative Law. This body of law also stipulates where and when a recovery agent can (or cannot) take possession of your car. If the vehicle is parked in a public area – such as on the street or in a public parking lot – they can repossess the car or truck. 

Recovery agents are not permitted to repossess vehicles from locked or gated areas or driveways – and are not allowed to breach the peace, use physical force, or carry firearms. 

If Your Car is Repossessed

Having your car repossessed is upsetting, and it can be incredibly stressful if you have valuable personal items in the vehicle. The good news is that you have the right under the law to retrieve your personal property from the car. 

The recovery agent must maintain an accurate account of the personal items found in a repossessed car. Remember, the lender will likely sell your vehicle, so be sure to claim your personal items immediately. Recovery agents are allowed to dispose of your unclaimed property after 45 days. 

The lender must provide written notice of the repossession after it occurs. Here are some more facts that you should be aware of: 

* The lender may sell the car or truck via public auction or private sale.

* The lender must provide you with notice of such a sale. 

* Repossessed vehicles must be sold in a “commercially reasonable manner,” meaning that the sale price must be close to fair market value. 

If the vehicle is sold for less than the amount still owed on the loan, the lender can sue the borrower for the difference. You can be sued for this deficiency balance or obtain a court-ordered deficiency judgment against you. The borrower may be held responsible for interest fees, late fees, and repo fees as well. 

Speak With Your Lender 

If you’re struggling to make your car payments, it is best to contact your lender as soon as possible. Many lenders are willing to work with borrowers if it is believed you can catch up soon, even if you are currently late. They may agree to a revised payment schedule or lower monthly payments. Be sure to get any new agreements in writing to protect yourself and avoid future misunderstandings.

Your lender may opt not to offer a solution and require you to return the vehicle. It may be financially beneficial to agree to a “voluntary repossession.” However, you will still be responsible for any deficiency balance and will likely see a negative report against your credit score.

There are other solutions available to those who need financial help. Bankruptcy may be an effective way to save your vehicle and get back on track to financial stability. If you are falling behind on your payments and would like to discuss bankruptcy options, an experienced bankruptcy attorney can help. Call Richard V. Ellis today for more information.