If you want to reclaim your car, van, motorcycle, SUV, or another motor vehicle after it's repossessed, you might be wondering if you should hire a lawyer. In some cases, like if you want to catch up on the overdue amounts or pay off the loan, then you probably don’t need an attorney’s help. But if the lender wrongfully repossessed the vehicle, you'll probably need a lawyer to help you get the car back.
Read on to learn more about when it makes sense to hire an attorney—and when you probably don’t need one—to recover your vehicle after repossession.
If you take out a loan to buy a car or other motor vehicle, you’ll typically sign a contract that states the vehicle acts as collateral for the loan. If you fall behind in payments, the lender may repossess the car. The lender will then usually sell it to pay off the debt, or at least part of the amount owed.
Vehicle repossession laws vary from state to state. Often, the lender is able to repossess a car by what's called “self-help” repossession. With this type of repossession, the lender doesn't have to file a lawsuit in court, but instead can just hire the repossession company to go get your vehicle—so long as it doesn’t breach the peace while doing so.
Depending on the circumstances, you might or might not need assistance from a lawyer to get your vehicle back after the lender repossesses it.
Depending on the terms of your loan contract and state law, you likely have two straightforward options for getting the car back: Redeeming the vehicle or reinstating the loan payments.
If you want to do either of these things, you probably don’t need to hire an attorney.
To redeem the vehicle, you’ll have to pay the entire loan balance, plus any late fees, collection costs, and repossession costs, like towing charges, storage fees, repair expenses, and others. After you redeem, the lender will return the vehicle to you, and you’ll own it outright.
To reinstate the loan, you must pay the past-due amounts, including late charges or other fees, plus repossession costs. Upon reinstatement, the lender will return the vehicle to you, and you resume making regular payments.
After the repossession, the lender will probably send you a letter telling you about your right to redeem or reinstate. The letter will also usually contain details on how you should proceed if you’d like to exercise either of these options.
Repossession is sometimes illegal. If you think your vehicle was unlawfully taken, you should consider hiring (or at least consulting with) a lawyer. A lawyer can tell you if the repossession agent acted unlawfully when taking your vehicle, and will know how to raise the issue—either directly to the lender or by filing a lawsuit in court—to get your vehicle back.
Here are a few examples of situations when the repossession might be illegal.
Repossession agents must follow certain guidelines when taking your vehicle. They can’t threaten you, use violence, break into a locked garage, or damage your personal property, among other things.
If your lender previously accepted late payments or agreed to change your payment date, the terms of your original contract might no longer apply—and you might not actually be in default.
Under the terms of most car loan contracts, the lender can repossess the vehicle if the borrower doesn’t have adequate auto insurance in place. But if your insurance coverage didn’t lapse—maybe you just switched to a different insurance company—then your lender can’t repossess the vehicle.
Mistakes sometimes happen. It’s not unheard of for a lender to repossess a vehicle when the borrower isn’t behind in payments.
The legal issues surrounding unlawful repossessions are complicated. It can be very difficult to get your vehicle back without the help of an attorney if any of these things has happened to you. You should also consider talking to an attorney if you need more information about your redemption and reinstatement rights under state law or the terms of your loan contract.
