Tuscaloosa Repo Lawyer
When you lease a vehicle or take out an auto loan, you enter into a legally binding contract with the lender. Unfortunately, circumstances beyond your control may lead to late or missed payments on the car loan. A Tuscaloosa repo lawyer at Eric Wilson Law can help you explore the available options for securing your financial future. Our law firm helps people take action to handle their debts and get a fresh start. The repossession process can be stressful to handle alone, so call 205-349-1280 and let us help. A repossession attorney at Eric Wilson Law can meet with you one-on-one and provide free initial consultations for your specific needs.
Can a Repossession Company Legally Take My Car?
When you take out an auto loan with a lender, you sign a legally binding contract to keep current on the payments. When you violate this contract, the lender has a legal right to repossess the property. The process of automobile repossession can be a tricky situation to handle, especially if you are unfamiliar with Alabama’s repossession laws.
In most cases, lenders repossess vehicles after the owner voids some part of the contract. Late and missed car payments can contribute to repossession, but some contracts stipulate the type of insurance coverage you need to have on the vehicle. A lapse in insurance coverage can cause a car lender to consider repossession.
Alabama Repossession Laws
Under Alabama law, a repossession agent has to follow very specific rules when it comes to auto repossession. Repo agents cannot breach the peace when repossessing a vehicle. This includes any type of physical force or threat of violence. A repo agent cannot enter a locked garage or any property that does not belong to the debtor. It is against the law, however, to attempt to ‘hide’ the vehicle on another person’s property.
How Can I Get My Car Back?
You can explore a few different car repossession loopholes to get your vehicle back after a repo agent has taken it. If you aren’t interested in getting the vehicle back or don’t have the money to pay the entire balance of the loan agreement, you may still end up owing the lender. If your lender decides to sell the repossessed vehicle at auction and the cost doesn’t cover the remaining loan balance and repossession fees, you may end up with a deficiency judgment against you.
Check Your Contract and the Pre-Sale Notice
First and foremost, check the details of your contract. Every lender uses different contracts for their loans. Some contracts may stipulate that a single late payment puts you in default and at risk for repossession, but other contracts may give a 30-day grace period for late payments before the loan goes into default.
Before the lender does anything with the car, they have to give you written notice of their intentions. The letter should include the time and date of any auction sale and give you information about how to redeem the car.
Redeem the Car
If you have the money available, you can usually pay off the remaining loan balance and any costs associated with the repossession.
Reinstate the Loan
Some lenders may allow you to reinstate the loan. You would have to pay all past due balances and pay the costs associated with repossession. Your new loan contract may stipulate stricter terms to avoid another repossession. If you reinstate the loan, even one late payment could result in another repossession.
Refinance the Loan
Refinancing your car loan can be a short-term solution that can help you get your vehicle back. Your original creditor may allow you to extend the length of your loan and lower the monthly payments, but this usually means you’ll pay more in the long run for your vehicle. You may be able to refinance your car loan through a different company as well. This can help you get back on your feet and make more solid plans for the future.
Bid on the Vehicle at Auction
After your lender takes your vehicle, they sell it at an open auction to recoup the money left on your loan. This can result in you paying significantly more than your car is worth, or ending up with a deficiency balance. If you have $9,000 left on your loan but the car sells at auction for $6,000, you will still owe the lender at least $3,000. The payment at the auction goes towards paying off the cost of the repossession before it goes towards your unpaid loan.
How Can A Tuscaloosa Repo Lawyer Help Me?
Every lender has a different contract for their loan agreement. Having an experienced repo lawyer by your side can help you decide what legal action you can take to get your car back.
In some cases, the car can be returned if the lender or their repo agent violated the repossession law. Repo agents are allowed to enlist the help of local law enforcement officers, but they are not allowed to help either party with the repossession. They are simply there to keep the peace and prevent a conflict from escalating. If police officers step in to help the repo agent, both parties are in violation of the law.
A Tuscaloosa repo lawyer can also help you review the details of your contract with the lender to see if they followed the loan agreement.
Negotiate the Repossession
Having a repo lawyer by your side when you refinance or redeem the car loan can ensure that the new contract benefits you as well.
If your former car is sold at auction and the amount it sold for is not enough to cover the balance of the loan and repossession fees, you can be held accountable for the deficiency.
Stop Creditor Harassment
Getting constant calls and letters from creditors asking for money when you have financial troubles can be a nuisance. Creditors often go as far as contacting your place of employment, which can put your job in jeopardy. At Eric Wilson Law, we can help stop creditor harassment with an automatic stay during a bankruptcy filing.
Prevent Car Repossession by Filing For Bankruptcy
Normally under Alabama law, repossessed vehicles do not get an exemption when you file for bankruptcy. This means that under normal circumstances, bankruptcy cannot help you get back a repossessed car. After the repossession process has begun, there is very little you can do to stop it. Bankruptcy can help you avoid a repossession before it has begun. Filing for bankruptcy places an automatic stay on all debt collection efforts. This means that creditors cannot contact you or request payment until the bankruptcy proceedings are over. A Tuscaloosa bankruptcy attorney from Eric Wilson Law can help guide you through the available options for your specific situation.
Chapter 7 Bankruptcy and Repossession
The most common type of bankruptcy is Chapter 7. With this type of bankruptcy, a trustee will sell your assets (minus the exemptions) and use the funds to pay off any creditors. Under Alabama law, a car is usually not considered a valid exemption. Alabama does, however, have a “wild card” exemption under Chapter 7 bankruptcy. This allows people to exempt property that they have less than $7,500 in equity. Many people use this wild card exemption for their vehicles.
Chapter 13 Bankruptcy and Repossession
Filing for Chapter 13 bankruptcy allows you to set up a consolidated payment plan with all creditors. This form of bankruptcy can help families get back on track with past due payments and potentially lower the monthly payments of current loans. With Chapter 13 bankruptcy, you may have to reaffirm the car loan and sign a new contract, but you can often keep your vehicle.
Contact the Alabama Repossession Lawyers at Eric Wilson Law Today
Bankruptcy filing is a major decision. Many myths surround bankruptcy, but it can be a viable option for many families and have many benefits. An experienced bankruptcy attorney like Eric Wilson can evaluate your case and help you pick the option that is right for you. Life after bankruptcy may seem scary, but we’re here to guide you through the process.
Schedule a free consultation with a car repossession attorney at Eric Wilson Law, LLC and establish your attorney-client relationship today by calling 205-349-1280.