||When you buy a car, truck, or other vehicle
on credit, your creditor retains important rights in the vehicle until
you have made your last payment. These rights are established by the contract
you signed and by state law. The failure to make timely payments carries
serious consequences. Your creditor then has the right to "repossess"
- take back - your car without going to court, or without warning you in
advance. However, state law does place limits on how the creditor may repossess
the vehicle and resell it to reduce or eliminate your debt. Consider the
TIPS FOR CONSUMERS
- Contact the Division of Consumer Services.
- For further information, you may choose to contact your
private attorney or the Florida Department of Agriculture and Consumer
Services at (904) 488-2221 or (800) 435-7352 (800 HELP FLA).
- Since it is difficult to dispute a repossession once
it has occurred, contact your creditor once you realize your payment will
be late. Many creditors will agree to a delay if they believe you will
pay at a later date.
- What constitutes default will be defined in your contract.
An example could be failure to make a timely payment. However, if your
creditor has agreed to accept your late payment or to change your payment
date, then the terms of your original contract may no longer apply. If
you do reach an agreement to modify your original contract, make sure it
is in writing and signed by both parties to the contract.
- Generally, your creditor has legal authority to seize
your car as soon as you default on your loan. Once you are in default,
your creditor may repossess your car at any hour of the day or night, without
prior notice. The creditor may also come onto your property to do so. However,
the creditor may not commit a "breach of the peace" by using
physical force or threats of force. If a breach of the peace occurs, your
creditor may be required to pay a penalty or compensate you for any harm
done to you or your property.
- Voluntarily returning the vehicle to the creditor may
reduce your creditor's expenses in retaking the car, and may reduce the
amount you will owe the creditor. But remember, you will still be responsible
for paying any deficiency on your loan, and your creditor may still enter
the repossession on your credit report.
- Once your car has been repossessed, your creditor may
decide to keep the car as compensation for your debt or resell it in either
a public or private sale. In either case, your creditor must notify you
about what will happen to the car. If the creditor decided that it wants
to keep the car, you have the right to demand that the car be sold instead.
You may choose to exercise this right especially if the car is worth more
than the amount owed on the loan. If the car is sold at a public auction,
you must be notified of the date in advance. If sold at a private sale,
you will be notified of a date after which it will be sold. Any resale
must be conducted in a "commercially reasonable manner." For
example, a resale price which is below fair market value may be unreasonable.
If this occurs, you may have a claim against the creditor for damages,
or a defense against a deficiency judgment. Lastly, you may also be entitled
to buy back the vehicle by paying the full amount owed, plus any expenses
incurred by the creditor. In addition, you may be able to reinstate your
loan by paying the amount you are behind on the loan plus your creditor's
- Personal Property Left Inside the Vehicle.
- Whatever method is used to dispose of the repossessed
vehicle, a creditor may not keep or sell any personal property found inside.
This does not include most improvements made to the car, such as a stereo
or luggage rack. If your creditor cannot account for valuable articles
left in your car, you may be entitled to compensation and you should consult
with an attorney.
- What is a Deficiency Judgment?
- A deficiency judgment is the difference between what
you owe on your loan and what your creditor receives when reselling your
vehicle. A creditor who has followed the proper procedures for repossession
and sale is generally allowed to sue you for a deficiency judgment to collect
the loan balance. If your creditor has committed a breach of the peace,
the creditor may lose the right to collect a deficiency judgment. If you
are sued, you will be notified of a court date. You should attend the hearing
because it may be your only opportunity to raise legal defenses you may
have. An attorney will be able to advise you as to whether you have grounds
to contest a deficiency judgment.
- Consumer Credit Counseling Service.
- If you need help in dealing with your debts, you may
want to contact the CCCS. This non-profit organization with more than 850
offices in 50 states will try to arrange a repayment plan that is acceptable
to you and your creditors. The counselors will also help you to set up
a budget and plan for future expenses. These services are generally offered
at little or no charge. You can locate the nearest CCCS office by contacting
the National Foundation for Consumer Credit, Inc. at (301) 589-5600 or
- For more information on credit publications, or to obtain
a copy of BestSellers - a complete listing of all consumer publications
from the FTC - contact: Public Reference, Federal Trade Commission, Washington,
DC 20580; (202) 326-2222. TDD (202) 326-2502.
Return to Hispanic Crime Prevention
Source: Originally developed by the Florida Attorney