A car loan or lease does not give you instant ownership of the vehicle “free and clear”. You can drive the car, but if you fail to pay back the loan, your lender can take it back through a legal process called repossession. This is because the car serves as collateral for the loan.
Are you struggling to make payments on your car loan, boat loan, or any other vehicle loan? If you are worried about the repossession of your vehicle, consult our experienced Monroe bankruptcy attorney immediately!
The E. Orum Young Law Offices has filed over 20,000 bankruptcy cases in Northeast Louisiana and is well aware of creditors’ shady repossession maneuvers. Our reliable Monroe bankruptcy attorney can stop repossession and assist you through the bankruptcy process. Members of our legal team have received awards such as the Gold Medal Congressional Award. Our Trial Guarantee assures that we will go to trial if you request it. Get a free case evaluation and legal advice by contacting our law office right away!
What Are The Car Repossession Laws In Louisiana?
Many laws throughout different states are similar, if not identical. And although there may be some minor differences in auto repossession laws, they are all fairly basically similar in this: you fall behind on your car payments, and then a repo man appears in your driveway.
However, there are numerous nuances in the law that can make repossession easier or more difficult for both the vehicle owner and the lender. Louisiana law allows lenders to move ahead with repossession without having to first obtain court approval as long as your car loan contract specifically allows for repossession, and the lender must use a state-licensed repossession agent.
According to Louisiana Repossession Law, your property can be repossessed if the following conditions are met:
- Repossession in Louisiana can take place if you entered into a signed agreement while using the property as loan collateral.
- If you do not honor the terms of the auto loan agreement, the property can be repossessed immediately.
- Almost all lenders will require you to acknowledge this in your loan documents, such as with a car loan, that could lead to car repossessions.
- A large percentage of Louisiana repossessions are car or truck repossessions, but any Louisiana vehicle repossession that is encumbered with a loan can be considered a repossession.
- This can include ATV repossession, motorbike repossession, RV repossession, boat repossession, and even airplane repossession.
Even though Louisiana vehicle repossession agencies have many legal rights to recover your vehicle, they must follow certain rules that limit where and how they can repossess your property:
- A Louisiana repo man cannot enter your home without your permission to retrieve your property.
- A Louisiana repo man is not permitted to use violence in repossessing your vehicle or any other property.
- Repossessions in Louisiana are forbidden when a repo man tricks you to bring your vehicle into a shop and then repossess it after you leave.
- Nevertheless, if you bring the vehicle to the shop on your own, the repo man has the authority to step inside to take your car or truck up for repossession.
- A court hearing is not required in Louisiana for a lender to repossess your vehicle.
How Many Payments Can I Miss Before Facing Repossession?
According to Louisiana law, you must default on 2 successive payments on their due date first before the lender can start the repossession process. If you make payments more often than once a month, you are considered in default after 60 days are up since your last car payment. It is also important to read the contract you signed when you bought the vehicle. It will contain more detailed information about what will happen if you miss a loan payment.
Will I Be Notified Of The Repossession Before It Happens?
Under Louisiana law, you are entitled to notice of the repossession. The statutory requirements for this are very specific. The notice must state in 12-point type that the lender has the right to repossess your vehicle without further notice or legal process. Your lender can’t come and collect your car merely hours after your car payment was due unless your missed payment has been at least 30 days. After taking your car, the lender has 30 days to file a Notice of Repossession with the Recorder of Mortgages in your parish.
Can I Sue For Wrongful Repossession?
If a vehicle has been unlawfully repossessed, the debtor may be able to file a lawsuit against the lender and the repo man, even if the debtors have been late or defaulted in their loan payments.
What Are My Options to Stop Repossession?
File for Bankruptcy
Because of their overall financial situation, filing bankruptcy might make sense for some people. At the very least, bankruptcy will temporarily stop:
- actions to collect on the deficiency balance
- lawsuits for deficiency judgments,
- Bank attachments or wage garnishments resulting from deficiency judgments
In general, you can file a consumer bankruptcy petition under Chapter 7 bankruptcy or Chapter 13 bankruptcy. The type of bankruptcy you file has differing impacts on your car loan. While bankruptcy under either chapter protects you from the collection on the deficiency balance, none of these bankruptcies allow you to keep the car unless you make some provision for payment. You may only have to pay the present value of your vehicle at a lower interest rate if you file for Chapter 13 bankruptcy. If your lender has already repossessed your vehicle, you must act quickly. You usually have ten days from the date of repossession to file a Chapter 13 bankruptcy petition.
Be Brave And Call Your Lender
Repossession is an unpleasant experience for both lenders and borrowers who lose their vehicles or family possessions due to the inability to make monthly payments.
A lot of creditors say they would prefer to be paid rather than take back the property because they will almost always lose money during the repossession process.
Perhaps the most heartbreaking fact is that most repossessions could have been avoided if the borrower had pursued a few simple steps prior to defaulting on the loan.
The repossession of collateral on a defaulted loan is nearly every lender’s last resort and affects only a small percentage of all installment loans. Even so, creditors repossess properties such as household appliances, automobiles, boats, and expensive artworks every day somewhere in the country.
According to experts, the best way to avoid repossession is for the debtor to contact the lender and try to work out a way to eventually pay the money owed as soon as he or she realizes the likelihood of missing a car payment.
Keep Your Vehicle In Your Garage
The quickest way to get your car back is to never give it to them in the first place. A repo man is forbidden to enter a private residence to recover a vehicle. This, however, does not apply to your driveway or a side street, but a man’s garage is his castle. Your car will not be repossessed if you keep it inside a private garage.
Simply be aware that a visit to Wal-Mart, your workplace parking lot, and every other public space could provide the repo man with the necessary opportunity for repossession. They will keep an eye on your house and follow you wherever you go. Be aware that your repo man will soon return with a court order and a deputy. As such, hiding your vehicle will no longer be a good deterrent at that point.
Know What The Repo Man Can And Cannot Do
This may not help you during this particular repossession, but if the repo man is getting out of line, you may possibly be protected from future repossession attempts. The repo men are forbidden to “breach the peace.” Breaching the peace, as you may expect, entails making threats or using force.
Some debtors try to incite a breach of peace by provoking repo men into physical confrontations. This may be an effective way to stop a repossession, but it definitely has consequences both during and after the altercation. We do not advise you to take that path. However, if the repo man enters your property without your permission, threatens you, or uses physical violence against you, you may be able to delay or prevent future repossession efforts and even sue for damages.
Should I Voluntarily Surrender My Car In Louisiana Instead of Having It Repossessed?
If you are not able to continue making payments on your vehicle, you could surrender it to the lender or dealership from which you purchased it. This is known as voluntary repossession.
When you do a voluntary repossession, many lenders will advise you to sign a form stating that you are returning the vehicle. You are not required to do this, but it may help you in avoiding repossession fees. This reduces the deficiency balance, or the amount owed after the lender sells your vehicle.
What Happens To The Personal Property I Keep in My Car?
Do not leave any personal belongings in your car if you are truly worried about it being repossessed. If you have personal belongings inside your car and the car is repossessed, you only have 10 days to reach the creditor and demand that your property be returned to you. The creditor is obligated to return your things promptly. If you do not get in touch with the creditor within 30 days, your personal property will be considered abandoned and the creditor is no longer obligated to take care of it.
Consult Our Bankruptcy Lawyer To Know How To Stop Repossession Immediately!
All the bankruptcy attorneys at E. Orum Young are members of both the Louisiana State Bar Association and the National Association of Consumer Bankruptcy Attorneys.
Don’t go through your financial difficulties alone! Reach out to us today or fill up our online contact form to find out which bankruptcy type is best for you, how to file bankruptcy, what legal options you have to save your property and assets, and how to start to live a debt-free life. A free case evaluation is the first step on your path to financial freedom.
At E. Orum Young Law Offices, we believe that meeting with you and discussing your case is the best way to judge whether our bankruptcy attorneys can help you. Our bankruptcy attorneys are happy to provide a free consultation to answer your financial concerns and alleviate your anxiety. Contact us today!