Has Your Vehicle been Repossessed? Are you now being sued for the balance?

Maybe you had your car or truck repossessed because you were behind on payments.  All is not lost. Were you sued for the deficiency on your note after the vehicle has been sold at auction? Generally what happens is that once the creditor repossesses the vehicle, they will dispose of the vehicle , often by sale, and usually at an auction, then they will apply the proceeds of the sale to your balance. then bring a lawsuit for the remaining balance on the note. You have rights and protections under the law. Texas law provides a number of protections that surround the repossession, auction, and post disposition lawsuit for deficiency that will follow.

First, the repossession must be conducted without breaching the peace.

Second, you have the right to redeem your vehicle before it is disposed of.  If the creditor fails to give you the opportunity to redeem your vehicle you may have a very strong claim against them under the Uniform Commercial Code 9.

Third, everything about the disposition of the vehicle must be done in a commercially reasonable fashion. This covers everything from minor repairs and reconditioning to the advertising and conduct of the sale. In other words, they cannot sell the car to their brother in law for $200. This is a condition precedent to any recovery in any deficiency lawsuit.

Fourth, after the disposition of the vehicle the creditor must send you notice of the deficiency or surplus. Failing to do so is also a actionable the UCC 9.

I defend consumers that were sued by Ford Motor Credit, sued by Suntrust Bank, sued by Investment Retrievers, and others for post repossession deficiency lawsuits. Often, creditors in these types of debt lawsuits have difficulty demonstrating that they have disposed of the vehicle in a commercially reasonable fashion. The creditor’s documentation is often sparse in this area. Some debt buyers also bring these suits. First of all, any debt buyer is required to have a third party debt collector bond with the Texas Secretary of State. Second, they must have a license to be a holder of a Retail Installment Sales Contract with the Texas OCCC. Third, they must be able to demonstrate ownership of the debt in order to have standing to bring the lawsuit.

Also, the statute of limitations for debt lawsuits is four (4) years.

If you have had a vehicle repossessed or are now being sued for the deficiency balance on that car note please call me for a free consultation.