Can Someone With a Judgment Against You Repossess Your Car?

When an individual owes a creditor money and then becomes delinquent in repaying the debt, the creditor may seek a civil judgment against him in court, one that legally orders the debtor to pay the money he owes. The creditor can receive a civil judgment by filing a motion in a court of law. If he receives it, he is then allowed to take a number of collection actions. If, however, the debt is secured by a car, the car cannot be seized.

Repossessions

When a person takes out a loan to purchase a car, the car generally acts as collateral on the loan. The loan contract will often grant the lender the right to repossess the vehicle under certain circumstances, such as if the borrower falls behind in his payments. Depending on the law of the state, a lender may need to receive a judgment against the debtor before seizing the vehicle. In many cases, however, the lender may seize the vehicle with such an order.

Unsecured Debt

A loan in which the borrower offers a specific asset as collateral is known as a secured loan. When a loan is secured, the creditor is generally allowed to seize the collateral. If, however, a person runs up an unsecured debt with a creditor, the creditor is not allowed to seize the debtor's property, including his vehicle. An exception would be during a Chapter 7 bankruptcy in which the individual's assets may be liquidated and the proceeds distributed to creditors.

Liens

Although a creditor cannot directly seize a person's assets, including a vehicle, even after receiving a judgment against him, this does not mean that the creditor cannot petition a judge to place a lien on the debtor's property. If a judgment grants a creditor's motion to have a lien placed on a person's vehicle, then the debtor will be prevented from selling the car without first paying off the lien.

Illegal Repossession

Technically, a creditor can seize a debtor's car without receiving a court order to do so or without a contract granting him the right to seize it. This would, however, be illegal. If a creditor does illegally seize a debtor's property, this constitutes a violation of the federal Fair Debt Collection Practices act, as well as various state laws. If this occurs, the debtor has the right to take the creditor to court and seek possession of the car, as well as damages.