If you are behind in paying your car payments, you may face repossession. Many people believe that a lender must file a lawsuit to begin the car repossession process. However, this is not true.
A lender can begin the car repossession process by simply taking your vehicle. Once your car has been repossessed, you have a very short window of time to try to get it back.
For Texas residents, it’s important to contact a car repossession attorney immediately. Trying to negotiate with a lender may simply waste precious time and will likely be unsuccessful in getting your car back.
My Car Was Repossessed, What are My Rights?
Texas repo laws are fairly simple. A creditor can file a lawsuit seeking an order to begin the car repossession process.
However, automobile repossession laws in Texas allow creditors with valid liens on vehicles to use “self-help” methods when a borrower is behind on loan payments.
“Self-help” usually refers to hiring a repossession company to collect the vehicle from the person’s home, place of work, or any other location where the vehicle is parked.
We urge you to contact an experienced attorney to discuss your options for avoiding repossession. A lender may seek a court order for repossession if they cannot use a “self-help” option to collect your vehicle. Texas repossession laws require a lender to have a valid lien on the vehicle to repossess without a court order. In other words, you must have pledged the car as loan collateral for the lender to have a lien that covers it.
In many cases, individuals use a vehicle as collateral to obtain a loan for its purchase. The borrower signs documents that provide the lender with a secured lien on the vehicle. This secured lien is what allows the lender to take the vehicle under Texas repo laws if you do not make the payments.
It is important to note that a title loan company may also repossess a vehicle without a court order if it has a valid lien covering the vehicle. Title loan companies also require borrowers to pledge their vehicles as collateral for loans.
Why Cars Are Repossessed at Night
For a lender to repossess a car in Texas without a court order, they cannot breach the peace when seizing a vehicle. In most cases, if you simply tell a repossession company not to seize your vehicle, taking the vehicle despite your protests would be considered a “breach of peace.”
However, a “breach of peace” is not strictly defined under Texas law. Therefore, it is recommended that you consult a Dallas repossession lawyer if a lender takes your car under any circumstances.
Many repossession companies collect vehicles in the middle of the night or while you are at work simply because there is no one to tell them not to take it.
This applies if your vehicle is repossessed from your home in the middle of the night or from your workplace during the day. Repossession agents can come onto your property and take your vehicle as long as they do not breach the peace. Although, they are not permitted to damage your property or threaten you during repossession.
What Happens When Your Car Gets Repoed?
It is important to note that repossession companies are not licensed in Texas. Arguing with a repo person could lead to a heated confrontation. If the situation escalates, it is best to not argue.
After your car is repossessed, we recommend immediately contacting an attorney who can advocate on your behalf.
When a lender repossesses a vehicle, they must follow a specific process before they can legally sell it. You only have 10 days after repossession to save your car. After this period of time, the lien holder can sell your vehicle at an auction. Then, the proceeds of that sale are applied to the remaining amount owed, including late fees and expenses related to the repossession.
If the proceeds from the vehicle’s sale do not pay the loan in full, you continue to owe the remaining balance on the account. Therefore, the lien holder can still file a debt collection lawsuit seeking payment of the amount remaining after repossession.
The court can enter a judgment against you. This is referred to as a deficiency judgment and the lien holder could take legal actions to collect on that judgment.
How Do You Get a Car Back?
After repossession, your options are limited. A repossession lawyer who specializes in car repossession in the Dallas-Fort Worth area can help determine how to get your vehicle returned. These are a few options they may discuss with you:
Pay the Loan in Full
If you have the means to do so, you can repay the loan in full within 10 days. However, this is not a viable option for most people. If debtors are behind on the loan payments, they probably cannot come up with the full amount owed on the loan.
Catch Up on Payments & Reinstate the Loan
You may be able to reinstate the loan by catching up on payments. However, you will need to repay all past due bills, including late fees and the costs a lender incurs from repossession.
Refinance the Loan
Consider negotiating with the lender to refinance your loan, or work with another lender who is willing to finance a more reasonable loan using the vehicle as collateral. Unfortunately, if you were behind on your car payments, refinancing or obtaining a new loan after a car repossession may not be a sound, long-term financial decision.
File For Bankruptcy Relief
Bankruptcy can help stop car repossession. If you file under Chapter 13, you can get your car back after repossession. However, you must act quickly because of the 10-day window to save a car. If possible, it is best to file the Chapter 13 bankruptcy petition before a lienholder repossesses your car.
Is Bankruptcy Right for Me?
In many cases, Chapter 13 is an affordable solution to car repossession that also helps you eliminate other overwhelming debts such as credit card debts or medical debt. Often, eliminating these debts will make it easier to make your regular car payments and living obligations. A Chapter 13 bankruptcy can help you get out of debt for less than you owe to your creditors while keeping your car and other property.
Get a Free Consultation With a Dallas-Fort Worth Bankruptcy Attorney
Leinart Law Firm assists clients who are dealing with vehicle repossession. If you are unsure about what to do if your car is repossessed, speak with an attorney today. Call our debt and bankruptcy lawyers in Dallas and Fort Worth for a free consultation, or fill out the form on this page to get started.
