How Do I Deal with Repossession?

When you have put up your car or truck as collateral for a loan to buy that vehicle, the lender may have the right to take back the vehicle if you don’t may your payments on time. As a “provisional” self-help remedy, repossessions are strictly regulated under California law.

No, prior written notice is not currently required in California. And, lenders have become much more aggressive lately. Some may send the tow truck within thirty days after a payment is due. Whether they can legally do this may depend on the specific terms of your contract.

There are a lot of reasons why repossession might be unlawful to begin with. They might have made a mistake and you are not even late. The lender might have miscalculated the payment or finance charge. If they tow away your car without legal right to do so, they just stole your car.

No, this may limit your right to reinstate the loan and get your car back.

They will store it and charge you storage fees. Within a few days you should get a Notice of Intent to Sell Repossessed Vehicle in the mail. This is sometimes called an “NOI.” These are strictly regulated under California law. They must inform you of exactly what to do to reinstate your loan. That means, everything you need to do to bring the contract current, pay repossession fees and get your car back.

If you think there is any possibility of being in default and having your car repossessed, strip it of all your personal belongings. This includes anything in the trunk or glove box or under the seats. Do no leave any cash in the car. The “recovery” company, a fancy word for “repo man” is supposed to inventory and keep your things safe, but in our experience a lot of things just disappear. It may be really hard to prove what you had in the car. On top of that, some outfits charge an extra storage fee for keeping personal items in check.

If the NOI indicates that you have to pay a fee to law enforcement in connection with the repossession, it must indicate precisely where you must go to make this payment. It is usually a small amount, but without proof of payment, it is unlikely the storage yard will release your vehicle.

Yes, you can get a 10 day extension of the reinstatement/redemption period if you request it. If the NOI is not mailed from within California, you have an extra 5 days (that is, 20 days total) to redeem or reinstate. And you may be able to ask for a 10 day extension on top of that.

The lender has to itemize the amounts they are charging you. They have to separate out the amount due under the contract from the extra repossession fees.

No, never ignore a court summons. Do not let the lender take your default. There are many valid defenses to these harsh lawsuits. If, for example, they have not complied with the legal requirements for the NOI, the lender might not be allowed to collect on the debt, or maybe the amount they are claiming is inflated, or maybe there was fraud in the original deal. If you are sued, get a lawyer to represent you, but the time for you to respond is short, so do not delay.