Car Repossession Laws in New Jersey
If you are struggling with your monthly bills, you are probably also dealing with collection phone calls and threatening letters. While you are working hard to meet these obligations, a lender could take action to repossess your property. When you buy something on credit, whether it is a car, home, or household appliance, the property is collateral to secure the money lent. If you fail to make your required payments, you trigger a default. Depending on the type of property and agreement, the lender has the right to repossess the property.
In some cases, the lender must provide notice or receive permission from the court to take your property. The most common example of this is a home foreclosure. However, if you fall behind on your vehicle payments, a lender has the right under New Jersey law to immediately repossess your vehicle – without informing you of its intentions. If you are behind on a car or truck payment, being proactive could save you money, time, and headaches.
Our New Jersey bankruptcy attorneys have assisted and advocated for people in financial difficulties for decades. A repossession could be frightening. However, despite how far you are behind, it might be possible to save your vehicle while taking advantage of the many benefits of bankruptcy. Call Young, Marr, Mallis & Deane at (609) 755-3115.
Repossession in New Jersey
Repossession occurs when a lender retrieves collateral encumbered by a security agreement. While most repossessions in New Jersey are cars or trucks, any vehicle could be repossessed. For example, your motorcycle, RV, ATV, boat, or private plan could be repossessed if you fall behind on your monthly payments.
When you sign a car loan or a loan for any other vehicle, the security agreement will indicate that repossession is a viable remedy if you default on the loan terms. By signing the loan, you acknowledge that your lender has the right to repossess the vehicle.
Your lender is not required to provide notice or obtain a court order before taking your vehicle. There is also no inherent “grace period.” If you are one day late or miss one payment, your lender has the legal right to repossess your car or vehicle.
Notwithstanding the lack of notice requirement, vehicle repossession companies are prohibited from specific conduct. A repossession agent is not allowed to enter your home uninvited to recover the collateral. Additionally, an agent may not use threats or violence when recovering a vehicle. Furthermore, if you are tricked into dropping your vehicle off at a mechanic or gas station, the repossession is illegal. However, if you bring your vehicle in without incentive and on your own, a repossession agent is permitted to take it.
What Happens After a Vehicle is Repossessed in New Jersey?
Once your vehicle is repossessed, New Jersey laws dictate what your lender should do. First, you must receive a notice in the mail stating that your vehicle was repossessed and that you have the right to redeem your car or truck if you pay all outstanding payments and fees. The notice will also inform you where your vehicle is being stored. Depending on the lender and your loan agreement, you might be required to satisfy the full balance of the loan to retrieve your vehicle. You should contact our experienced Cherry Hill bankruptcy lawyers if you fear your vehicle will be repossessed or if it was already taken.
Personal Possession in a Repossessed Vehicle in New Jersey
If your car was repossessed, the repossession company has the right to remove your personal belongings and store them at your expense. Under the law, you will be given an appointment to redeem your personal property and vehicle. If the company does not allow you to retrieve your property, contact our New Brunswick bankruptcy lawyers.
Your Vehicle Could be Auctioned if Repossessed in New Jersey
Under New Jersey law, your lender has the right to sell a repossessed vehicle at a public auction if you fail to meet the deadline to redeem your car or truck. Your lender will provide you with notice of the sale date. After your vehicle is sold, you will be given additional notice informing you of the sales price. This will also include the remaining balance on the loan after the proceeds from the sale have been applied.
Lenders have the right to collect the remaining balance from you if the proceeds from the sale fail to cover the loan balance – including filing a collection action in court.
New Jersey Bankruptcies and Vehicle Repossessions
Filing for bankruptcy could stop your car from being repossessed or sold at auction. However, the type of bankruptcy you file will impact whether you will be able to keep your vehicle. A Chapter 7 case will slow the process down. However, if you cannot bring your loan current, you will likely still lose your vehicle. The advantage of Chapter 7 is the ability to discharge any remaining loan balance after your vehicle is sold at auction. Depending on the loan balance and the value of your vehicle, this could be a significant amount of money.
Chapter 13 allows individuals in New Jersey to reorganize their debt. Under Chapter 13, you will be permitted to pay back the money you are behind through your bankruptcy plan. There are specific Bankruptcy Code provisions your plan must adhere to, so it is critical to have our knowledgeable Mount Holly bankruptcy lawyers working on your case.
Experienced New Jersey Bankruptcy Lawyers Working to Stop Repossessions
If your car or truck is repossessed, it could leave you in a difficult spot. You need your vehicle to get to work, run important errands, and get the kids to school. Just because you are behind on your payments or your vehicle was repossessed does not mean you are out of options. Our New Jersey bankruptcy attorneys have helped many people in similar situations. Call (609) 755-3115 to set up an appointment at Young, Marr, Mallis & Deane.