Vehicle Repossession Laws
Oregon, like all states, has specific laws regarding the repossession of vehicles after car loans have gone into default. Often, lenders can repossess the vehicle as soon as you miss one payment. This is especially true of those who lend to individuals with poor credit (Buy Here, Pay Here dealerships). If you’re facing vehicle repossession or your vehicle has already been repossessed, then you likely want to know what your rights are. In this article, we’ll discuss your options for dealing with a vehicle repossession.
Oregon Repossession Laws
As soon as you have defaulted on one payment, a lender can hire a repo man to come and
repossess your car. Of course, most clever folks think that they can get away with hiding it, but this is actually illegal. If you’ve defaulted on the loan according to the terms of the contract, the lender can repossess the vehicle without notice.
However, the repo man may not “disturb the peace” in an attempt to recover the car. That
means that they cannot threaten you, break into your garage, or otherwise break the law in
order to recover the car. It can, however, remove the car from your driveway, a public place, or off the street. If you attempt to hide the vehicle, the lender will then get a court order and demand that you surrender it.
Once the creditor has repossessed your car, they have the ability to resell it. But in Oregon, the creditor must give you advanced notice before they sell the car. You can stop the sale of the car by paying the full amount owed on the car before the sale date.
Deficiency Balances in Oregon
While this is not true of foreclosure, a car lender can sue a debtor for a deficiency balance if they auction the car for less than the loan amount. The deficiency balance would be loan
amount minus any payments you made plus the amount recovered during the sale. They will also charge you for repossession costs and if they need to go to court to force the surrender of the vehicle, you’ll be getting the bill for that too.
Repo Men Must Follow the Law
Repo men cannot use force, threats, or violence to take possession of a vehicle. Any personal property within the vehicle must be returned to you without restriction. If your property is damaged or your personal effects are not returned to you, you can sue the lender for damages. In some cases, you can ask the court to block the repossession if you’ve made a partial payment and your lender has a history of accepting partial payments. In other words, if they want to repossess the car, they must reject your payment.
Car Repossession and Bankruptcy
Bankruptcy stops all creditor actions against you and this includes repossession. Additionally, an attorney may be able to stop a repossession before it happens. If your car has not yet been repossessed, then bankruptcy will stop a repossession.
Chapter 7 Bankruptcy and Car Repossession
Chapter 7 bankruptcy discharges unsecured debt. Your car loan is only unsecured after the car has been sold at auction. If your car has been repossessed and sold, you can discharge the deficiency balance in bankruptcy so that you don’t have to pay that money.
Alternatively, there are cases where there are other bills that are causing you to come up short on your car payments. If you can discharge those in Chapter 7, it might free up enough of your finances to continue making payments on your car. You will need to reaffirm the debt and commit to making future payments and arrearages.
If your car has been repossessed, you may be able to get it back by filing for bankruptcy. If you have non-exempt equity in the car, then the lender must return it because it is considered part of the bankruptcy estate. However, lenders won’t return the car without a court order, so it will be up to your attorney to ensure that the order is enforced.
Chapter 13 Bankruptcy and Car Repossession
Chapter 13 bankruptcy can help you prevent a repossession. Since Chapter 13 works by
reorganizing your debt into a monthly payment, you can continue making payments on your car and also repay any arrearages on your vehicle.
Chapter 13 also affords debtors some options on paying some (but not all) of their car loan back. As an example of how this works, let’s say that your car is worth $5,000 but you still owe $10,000 on the loan. A cramdown allows you to cramdown the loan value to the value of the car ($5,000) and place the other $5,000 into your unsecured debts. In other words, you may qualify to repay only the actual value of your car.
Talk to a Eugene, OR Bankruptcy Attorney Today
If you’re worried about how a repossession is going to impact your ability to get to and from work, talk to Tom at Butcher Law Office, LLC. We may be able to stop the repossession process or recover your car after it has been repossessed!
To learn more about how Chapter 7 bankruptcy can improve your life, please contact Lane County bankruptcy lawyer Tom Butcher today to schedule your free 60-minute in-office strategy session.
Eugene and Springfield Car Repossession Lawyer Helping Consumers
Imagine waking up one morning on your way to work and realizing that your car is no longer parked outside your home or in the driveway. This disheartening reality is what many individuals who are struggling with debt face every day in America. But car repossession can be avoided. Help is available! Learn more about how you can save your vehicle by filing for a Chapter 13 bankruptcy.
Why Does Vehicle Repossession Happen?
No one plans to have their car repossessed, obviously. But as soon as little as one payment is missed, the lender can declare the loan in default and order repossession. They are under no requirement to notify a borrower before repossessing their vehicle. So long as they don’t break into your garage, threaten you with violence, or otherwise “breach the peace”, they can remove the car from your property. Vehicles parked in driveways and on the street are the easiest to repossess. Those inside enclosures, like garages, cannot be accessed by repo men. However, it is illegal to attempt to prevent a repossession of your vehicle. The court can order the vehicle turned over and you may be penalized according to the terms of the contract or state law.
After the vehicle has been repossessed, the lender will sell it at an auction. The proceeds of the sale will be applied to the amount owed, but the borrower will still be on the hook for the difference between the loan amount and the sale. This is called a deficiency balance. The lender can then sue to get a judgment against the borrower and, if they receive a judgment in their favor, can garnish your wages, place liens on your home, or levy your bank account. That is not a position you want to be in.
If you act quick enough, you can prevent the lender from even repossessing your vehicle and you may be able to get it back even if it’s been repossessed already.
How Chapter 13 Bankruptcy Can Help
If your car has not yet been repossessed, filing for bankruptcy—any form of bankruptcy—will stop all creditor actions against you. This includes a vehicle repossession. However, keeping your vehicle after the bankruptcy has been processed can be tricky.
Those who want to keep their vehicle have the option of filing under Chapter 13 bankruptcy. All of your debts will be rolled into a lump-sum monthly payment including arrearages on your car loan. Additionally, you will need to stay current with future car loan payments.
Your bankruptcy attorney may be able to restructure payments and make the terms of your loan more favorable. You may also qualify for a reduced interest rate and in some cases, you may qualify to reduce the loan amount to the fair market value of the car itself (known as a “cram down”).
Talk to a Eugene and Springfield, OR Car Repossession Lawyer
If your vehicle was just repossessed or if you know it is about to be repossessed, call Butcher Law Office, LLC at (541) 762-1967 immediately for a free 60-minute strategy session to determine how to save your vehicle. There may be very little time to resolve a vehicle repossession. Contact Butcher Law Office LLC right away.