Vehicle loans are a form of secured financing. The car or truck that someone purchases serves as collateral property for the loan. If they default on their payments, the lender can reclaim the vehicle as a means of recouping what the company has invested.
In some cases, repossession is reversible, as people can redeem their vehicles. Other times, repossession leads to someone losing their vehicle as well as the equity they had accrued in a vehicle by making monthly payments, which can be a major setback for someone who is already struggling financially.
Although lenders technically don’t have to warn people about repossession before it occurs, they often do because the threat can push someone back into compliance. Unfortunately, sometimes lenders then go ahead and repossess the vehicle anyway. What rights does a vehicle owner have after a wrongful repossession?
They can get support to challenge the repossession
If a collection agent promised someone behind on their car payments that making two of the three missed payments would keep their vehicle out of the repossession process, only to have them wake up to discover their vehicle gone a week later, that borrower may have the right to take legal action.
Especially if there is a written record of the proposed arrangement between the borrower and the lender, they can easily show that they met the conditions set to retain the vehicle on that the lender repossessed it anyway. In some cases, simply sending written notice to the lender of the violation might be enough for them to remedy the situation.
Other times, they may refuse to return the vehicle or may try to impose hundreds of dollars in fees despite the repossession being an error on the part of the business. When the lender won’t do what is right, then it made be time to go to court.
The courts can reverse a wrongful repossession
If a judge agrees with someone’s claim that a lender violated their rights by repossessing a vehicle, there could be a court order issued granting the vehicle back to the person who financed the purchase.
Although the process of fighting back can be stressful, defending against a wrongful repossession and holding a lender accountable for unethical practices will be better for someone than absorbing thousands of dollars in lost vehicle equity because of a repossession that should never have occurred. Discussing a potentially wrongful repossession of a vehicle with a lawyer can help someone determine whether they are in a position to take action.