Repossessions

If you bought something on credit or put up something you own as collateral, the creditor may have the right to repossess it. Cars are often repossessed. We use a car as an example for repossessions and answer questions about what you can do.

When can someone repossess something from me?

• A creditor can repossess only if you signed an agreement making the property collateral.
• You must also have failed to comply with the written agreement.
• Most creditors have you sign papers allowing this when you buy a car on credit.
• A creditor cannot repossess a house or land. Instead, it must foreclose on a mortgage or sue you in court.
• A creditor cannot come into your house without your permission to take back your possessions, even if you are behind on the bill.
• Repossessions usually involve cars and trucks.
• A creditor can repossess your automobile, but only if it can be done peacefully.
• The creditor cannot trick you into bringing your car to the shop in order to repossess it.
• The creditor cannot use any force or threats of violence to repossess your car.
• However, the creditor does not need to notify you before repossessing.
• A creditor does not have to take you to court before repossessing.

Can I get my car back after it is repossessed?

• If your car is repossessed, the creditor must send you and the co-signors a notice of your right to redeem (get back) the car.
• This notice must be sent a reasonable time before a sale and it must tell you:
  • the date and time,
  • whether the sale is to be public or private, and
  • give you a phone number to call for more information.
• Often, however, to redeem you must pay off the entire balance owed on the car, not just the amount you are behind.
• In Alabama, you can't get the car back by filing bankruptcy.
• You should talk to a lawyer to find out about your rights. The lawyer can help you decide whether to try and get the car back.

What about the things I had in the car?

• If you have anything in the car when it is repossessed, you have the right to get it back.
  • Go to the creditor right away to get your possessions back. You may want have a witness go with you.
  • If you can't get your things right away, write to the creditor saying what you want returned. Then, make arrangements to pick them up.

What happens if I don't get my car back?

• The creditor can sell it to someone else.
• After the sale, the creditor must send you another notice.
• The new notice must list what you still owe and provide more information.

Do I still have to pay after my car is repossessed?

Yes. If the creditor sells the car for less than you owe on it, you still owe money. The creditor usually tries to collect the balance from you.

What can I do?

• If you are sued, you may have defenses and counterclaims.
• You may be able to sue the creditor for money damages:
  • if you did not get proper notices both before and after sale of the collateral
  • if the creditor made an unreasonable sale
  • if the contract papers did not tell you all they were supposed to tell you

Call a lawyer right away. You only have a short time to answer a law suit.

Reviewed September 2008

AlabamaLegalHelp.org offers legal information, not legal advice. This website provides information on your rights and options. However, the site does not apply the law to your personal facts. For legal advice, you should call a lawyer. To apply for free legal services in Alabama, call the Legal Services Alabama office that is closest to where you live OR call toll-free 1-866-456-4995. You can also apply online HERE.