The threat of having your car repossessed is no walk in the park. However, before the lender can take possession of the vehicle, certain procedures must be followed first. Understanding your options as a vehicle owner will help ensure that you are capable of restoring your ownership rights.
The basics of repossession are pretty much the same wherever you live. If you fall behind with your car payment, and the lender gets tired of waiting and decides to collect its collateral for the loan, you could lose your vehicle. Each state has its own laws regarding exactly how all this transpires. Ohio’s rules are explained in detail in Section 1309 of the state’s Revised Code. In some respects, they’re a bit more generous to consumers than other states.
Notice of Repossession
You’re probably aware that your vehicle is in danger of being repossessed if you haven’t made a payment for a while. You may have received notices demanding payment and alerting you that you’re in default on the loan. If you can’t, or don’t try to, make arrangements to catch up, Ohio allows lenders to repossess without giving any written warning first. The lender doesn’t necessarily have to take you to court first, either. It doesn’t need an order or judgment allowing it to take your car. Although, the repossession company will generally notify your local police department of what’s going on in case you report the vehicle as stolen.
If your contract with the lender doesn’t say how far you can fall behind before it takes action, the lender can repossess your car the day after you miss a payment. But if your contract provides for a grace period, Ohio law requires that the lender must wait until this time has expired.
Breaching the Peace
The repo man can’t breach the peace when he takes your vehicle. A breach of peace typically involves breaking through a gate or garage door to reach your vehicle. It also involves threatening you if you try to prevent the repossession agent from taking your car, meaning he can’t use physical force against you. If the repossession agent commits a breach of the peace, speak with a lawyer or legal aid service, because you might be entitled to damages. If you feel like you’re in danger, you can also call the police.
The flip side to this is that it’s illegal for you to interfere with the repossession itself. You can’t use force to try to stop the repo man from taking your vehicle, and you can’t try to hide your car so he can’t get it. If you do, the lender can file a replevin lawsuit against you in Ohio. The lawsuit asks the court to order you to turn over the vehicle, and you might be held responsible for paying any extra expenses incurred by the lender because you tried to conceal it.
After Your Vehicle Has Been Taken
Within five days of repossession, your lender must send you a notice of default and the right to cure. The notice tells you what you can do to get your car back, and Ohio law is a little kinder regarding this than some other states. You can make a deposit with the lender of up to two months’ car payments plus the creditor’s costs of repossession up to $25. You may also have to pay late charges, and you’ll probably have to catch up with your payments, bringing the loan current. You don't, however, have to pay the loan off entirely to get your vehicle back.
If you can’t come up with the money, the lender must send you a second notice within 10 days after the repossession takes place. This notice should tell you the vehicle will be sold, when and where the sale will take place and a minimum acceptable price for the vehicle.
Understanding Deficiency Judgments
When your vehicle is sold, this may not be the end of your ordeal. The creditor can sue you for any deficiency balance. The deficiency is the difference between your loan balance and repossession fees and what the vehicle sold for. If you think the lender failed to sell your vehicle in a commercially reasonable manner, meaning it could have gotten more money for the car if it had sold it some other way, you can make this argument in court to reduce what you owe, but you might need the help of a legal professional.