In Florida, failure to pay within 30 days allows the lender to repossess your car under a process that's spelled out in Chapter 537.012 of Florida's laws on title loans. A repossession is hard to fight once it happens, but the law does regulate how the lender can go about it, and resell a car to pay off the outstanding loan balance.
Basic Guidelines for Car Repossession
As set out in Chapter 537.012 of Florida's laws, the lender can seize your car as soon as you default, or miss a loan payment – unless he authorizes an extension to help you catch up. For example, you could ask to change the monthly due date, or suggest, "I can pay 'x' amount by 'y' date."
Many lenders will postpone further action if it looks like you will pay later, reports the Florida Attorney General's office in an online article, "How to Protect Yourself: Automobile Repossession." Just remember to get written confirmation of any changes in your auto loan agreement.
Allowable Repossession Actions
If you can't resolve the issue, the lender may send a repo man to seize your car any time without notifying you, according to the Attorney General's office. However, a repo man can't use threats or force, enter homes and businesses without the owner's permission, nor move barriers or gates to take a car, advises the Florida Department of Law Enforcement.
Any of these actions can trigger a breach of peace complaint from the borrower. However, if the repo man does seize your car, he must notify local police in two hours, FDLE's memo states.
Vehicle Resale Process
Once a lender reclaims the car, he must notify you of any proposed sale in 10 days, as Chapter 537.012 requires. He must also send a written accounting of remaining principal and interest, plus repossession and resale fees. You can then buy your car back by paying all required fees with a money order or certified check. The lender may also attempt to keep the car.
However, state law allows you to demand that your car be sold, which might prove useful if its estimated value exceeds what you owe on it, states the Attorney General.
Recovery of Personal Items
Per Chapter 493.6404, the lender must return any personal property that's left inside the vehicle, following payment of reasonable inventory and storage fees. If you don't claim your property in 45 days, the lender may dispose of it as he wishes. He must also keep records of the contents for two years, and turn over any illegal items that he finds to law enforcement.
Deficiency Judgments for Outstanding Debts
Lenders can still sue to recoup any debts that remain once your car is sold. Such amounts are called deficiency judgments, which the lender can seek under Chapter 537.012 – plus attorney's fees and court costs – within 30 days. In that case, you will receive a notice to attend a court hearing, where you can respond. One possible defense is failure to get fair market value for your car, as the law requires, advises the Attorney General's office.
Other defenses exist if the borrower can prove the lender committed breach of peace offenses in repossessing the car, or can't account for valuable items like luggage racks and stereo systems.
Five-Year Statute of Limitations for Car Loans
Chapter 95.11 outlines a five-year statute of limitations for collecting a car loan. However, if a creditor wins a legal judgment, and can't collect on it right away, the law allows him 20 years to pursue it.
- Florida Attorney General Pam Bondi: Consumer Protection: How to Protect Yourself: Automobile Repossession
- Florida State Legislature: Florida Statutes: Chapter 95: Limitations of Actions: Adverse Possession
- Florida State Legislature: Florida Staututes: Chapter 493: Private Investigative, Private Security and Repossession Services
- Florida State Legislature: Florida Statutes: Chapter 537.012: Repossession: Disposal of Pledged Property: Excess Proceeds