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Repossession – What Happens When You Can’t Make the Payments?
June 9, 2010 in consumer goods by admin
Unlike garnishment and attachment of bank accounts, which in the case of non-governmental entities always require a personal judgment against the debtor by debt collectors, repossession can, and usually does, occur without any sort of judicial action. The repo men can sneak out and take your car in the dead of night, or troop into your house-with a law enforcement official or your permission-and remove a washing machine or other consumer goods without a court order. How can this happen?
Repossession is a “contractual” right. That means that when you bought the item you signed a contract that provided that the debt you were incurring was a “secured” debt (secured by specific goods, including the item you were buying and sometimes other items as well). You also gave the seller the right to take the item back without suing you first if you stopped making payments. For non-governmental entities, if you did not give the company the right to take things, they are not allowed to do it without a court order, and doing so is criminal. Even if you owe them the price of the thing, the legal “title” or right to it stays with you until and unless a court takes it away.
If a company seizes property without any contractual right to do so, it is called “conversion.” If it has the right in general, but for some reason this right has not been perfected (for example, because they failed to provide you a contractually required waiting period), it is called a “wrongful repossession.” Because repossession is sometimes done in secret by private individuals, the rules are generally pretty strict that the repossessing agents cannot cause a “breach of the peace.” That is, they cannot strike, or even touch, you. They cannot use any kind of force at all. You do not need to respect their command to “give them the keys” or get out of the way as they attempt to drive off your car. In many, if not all, states, any unwanted contact during a repossession is a battery and a breach of the peace that makes the repossession wrongful. I therefore used to advise my clients to block the repossessing agents with their bodies. Whether you have a right to initiate contact or defend the property in question with violence is questionable.
Of course this rule changes if the repossessors bring the police with them. The repossession may be illegal, and the presence of the police may also be illegal, but the presence of the police is itself considered coercive-so you can sue for wrongful repossession without having to stand in front of the police.
After repossession, the company that has repossessed the goods typically files an action in court to “restore” title to the goods to itself. In my experience, these actions are essentially never contested, but if for any reason the repossession was “wrongful,” that would typically be a defense to the transfer of title sought by the repossessors.
Most states have very specific “rights of redemption” for objects that have been rightly repossessed. You can find these for your state by Google the term “right of redemption” and the object repossessed and your state name. Generally these rights are expensive to invoke, since they normally provide for full payment of missed payments on the contract plus various fees. But sometimes people have the means and the need to redeem their property from the repossessing agents. In most if not all states you would have that right, which would typically be exercised by intervening in the court action brought by the company repossessing the goods to restore title.
Repossession usually happens to the perennially dispossessed-the poor-who often do not litigate to protect their rights. For this reason, even the repossession agents can be careless in their actions (or actually indifferent to the law). This may give you an opportunity to prevent the repossession or force the company to restore the items to you.
You can get a lot of help, much of it free, from my website at: http://yourlegallegup.com. Or please take a look at a brief video presentation: http://www.youtube.com/watch?v=zT60kiHn8G8
Kenneth H. Gibert.
I Received a J.D. from Washington University Law School in 1989 and practiced law in St. Louis city and county (federal, state and local courts) for almost fifteen years, the last several of which were focused almost exclusively on debt litigation. I founded my websites in response to this opportunity. My mission is to protect ordinary people from being taken advantage of by the debt collectors.