Most consumers know that repossession means losing your vehicle and the payments that you’ve already made on it. However, that is only the beginning of your problems if your vehicle is repossessed, so the first step you should take is to speak with a repossession attorney.
Patrick Altes, a Florida “repo agent,” told the Chicago Tribune in 2018, “So much of America is just a heartbeat away from a repossession – even good people, decent people who aren’t deadbeats.”
If you are having difficulty making payments on a vehicle loan in Massachusetts, keep reading. You’re about to learn how to avoid a vehicle repossession, and you’ll also learn what steps you can take if, despite your efforts, your vehicle is repossessed in this state.
CAN ITEMS OTHER THAN VEHICLES BE REPOSSESSED?
Most repossession actions in Massachusetts involve vehicles, but real estate, art, machinery, farm equipment, or anything else that a consumer has financed and has not paid off could conceivably be repossessed if that consumer falls behind on the payments.
A foreclosure on a home, for example, is technically a “repossession,” but today the word is mostly used when discussing vehicles and vehicle loans. The lender is named as the lienholder on the vehicle’s title and may reclaim the vehicle if the borrower fails to make payments on time.
If you purchased a vehicle, you must be notified before it can be repossessed in this state, but if you fail to meet the terms of a loan for a vehicle that you have leased, no advance notice of repossession is required by Massachusetts law.
WHAT SHOULD A NOTICE OF REPOSSESSION TELL YOU?
The notice that a vehicle purchaser receives prior to repossession is called “Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act.” It gives a borrower twenty-one days to pay what is owed on the vehicle and avoid a repossession. Also, the notice:
- Cannot be sent until a payment is at least ten days past due
- Must tell you the exact amount that is due.
- Must include a final due date
WHAT ARE THE RULES FOR “REPO” AGENTS?
Typically, a lender employs a third-party or “repo” agent, such as a towing service, to conduct a repossession. Lenders and their agents who are employed to conduct vehicle repossessions:
- Cannot use threats or force when repossessing a vehicle
- Cannot breach the peace or behave in a disorderly manner
- Cannot enter onto your owned or rented property without your consent
- Must inform the local police about the repossession within one hour of taking the vehicle
Technology has made repossession a ruthlessly efficient process. Some towing companies now use digital cameras and computers to identify and locate the vehicles they repossess. In 2020, you can’t simply hide a vehicle and make the threat of repossession go away. It won’t.
CAN YOU GET A VEHICLE BACK IF IT HAS BEEN REPOSSESSED?
After a repossession in Massachusetts, a lender is still required to hold the repossessed vehicle for another twenty days. The borrower may attempt to regain possession of the vehicle at this time.
However, during the twenty-day holding period, a lender may require the borrower to pay the entire amount still owed on the loan – along with reimbursement for the lender’s reasonable, associated expenses.
And even after the twenty days, a borrower may still claim the vehicle until the lender sells it or contracts to sell it. A lender may also sue a borrower for any deficiency resulting from the sale of the vehicle, including repossession and storage costs, if the deficiency amount is $2,000 or more.
HOW SHOULD YOU RESPOND TO A REPOSSESSION?
If your vehicle is about to be repossessed, you have several options. Try communicating with your lender, or ask your attorney to contact the lender on your behalf. Repossession is costly, so many lenders are willing to work with borrowers who are willing to work with them.
The one certain way to avoid a vehicle repossession – provided that the lender has not already initiated the repossession process – is to file for bankruptcy. To do that, you’ll need a bankruptcy attorney’s help.
HOW DOES BANKRUPTCY HELP YOU AVOID REPOSSESSION?
When you file for bankruptcy in Massachusetts, the court issues an order called an “automatic stay” that immediately prohibits all debt collection efforts and prevents a lender from repossessing your vehicle. By filing for bankruptcy, you can temporarily prevent your lender from repossessing your car. This will give you more time to sort out your finances.
ARE THERE OTHER OPTIONS FOR AVOIDING REPOSSESSION?
Bankruptcy is a drastic step, and it’s not right for everyone. A Plymouth repossession attorney can help you decide if bankruptcy is appropriate in your own situation. A repossession lawyer can also negotiate with the lender on your behalf or help you arrange a debt consolidation.
If your loan payments are too high, you might also consider refinancing a new loan with more affordable payments. A refinance loan might also be able to reduce your monthly payments with a lengthier repayment period, a reduced interest rate, or both.
A repossession damages your credit score and restricts your ability to obtain a loan. It is one of the worst things that can happen to your credit, and it can make your financial life more difficult for years into the future. A repossession remains on a consumer’s credit report for seven years.
If you are concerned about repossession, you probably need to act at once – before a lender can take the legal steps required to repossess your vehicle. Speak with a Massachusetts repossession attorney promptly if you believe that a repossession is about to happen or is already in progress.