Federal and state laws allow a repo man, or automobile repossession agent, to unlock your car door while seizing the vehicle. Leaving your doors locked with the car parked on the street won't prevent the repossession agent from taking it. However, there are also laws that regulate just how much force the repossession agent can use while claiming your vehicle.
Timeline
Banks, credit unions and other lenders order repossession of vehicles after the owner stops making payments as agreed. In some states repossession is possible after just one missed payment, but usually efforts begin after the borrower falls behind by two or three months.
Restrictions
The Federal Trade Commission reports that repossession agents must follow basic rules. The repossession agents are usually tow truck drivers, and by law they can seize the car anywhere in public. The car can be taken without notice from a parking lot, place of business or from owner's home. However, the repossession agent cannot break into a locked garage to take the car or threaten the owner with bodily harm while taking the vehicle.
Possessions
Federal law does allow the tow truck driver to haul the car away without notice even if there are personal possessions inside, such as a child safety seat or sporting equipment. State laws prohibit the lender or repossession agent from immediately selling or destroying personal items found inside the car, however. Lenders must contact the former owner of the car to allow for retrieval of the items.
Precautions
Borrowers who are struggling to make their car payments should contact the lender. Some lenders may allow borrowers suffering a temporary hardship to skip a payment while paying only the finance charges for that month. That may not help much if the borrower's financial problems are severe, but it is better than simply ignoring the payment.
Alternative
Voluntary repossession is an option if the borrower clearly cannot afford the car. Voluntary repossession allows the car owner to make an appointment to surrender the vehicle to the lender. This prevents the embarrassment of a forced repossession but may not end the borrower's responsibility for the automobile loan. After repossessing vehicles, lenders usually sell them at auction, with the former owner held liable for any remaining balance on the loan. For example, the former owner may owe $8,000 on the auto loan at the time of repossession, but the car may sell for only $5,000 at auction. In that case the lender can file a lawsuit seeking a court judgment for the difference.
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