Most of us have at one time or another been late on a payment or two. If late payments have caused you to face the possibility of having your car repossessed, knowing your options is important. The state of Alabama has certain laws that are designed to protect the rights of consumers in regards to vehicle repossession. Banks and repossession companies must comply with these laws or face tough financial penalties or other legal ramifications.
Terms of Contract
According to Alabama law, even if the debtor is only one day late, the bank or lending institution that holds a lien on the vehicle has the right to repossess. The bank or lending institution does not have to provide you with any sort of extra time to make your payment before repossession. If, however, your purchase contract has a grace period built into the terms of the payment structure, the bank or lending institution may not repossess the vehicle until you are at least one day past the grace period specified in your contract.
Lawful Transaction
Under Alabama law, the bank or lending institution or any agency acting on its behalf must not violate the law in order to repossess the vehicle. The bank, lending institution or professional repossessor must not violate the peace in any way. He or she can not use violence or the threat of violence in order to repossess the vehicle. Additionally, the repossessor and lending institution must act truthfully. He or she may not lie to you by advising you to bring your car in for repairs or the like in order to trick you to gain access to the vehicle for repossession. All transactions must be done in accordance with the law. If a bank, lending institution or anyone acting on their behalf violate any of the mentioned terms, the bank may be ordered to pay restitution to the debtor or forfeit any rights to reimbursement for profits lost due to costs incurred.
Personal Property
If a vehicle is repossessed with personal items belonging to the debtor inside, the items must be returned as soon as reasonably possible. Valuables such as money, jewelry and the like that may have been left in the vehicle are not subject to sale in order to recover any costs incurred by the bank or lending institution for money owed. Sale of these items would constitute theft and the bank, lending institution or anyone acting on its behalf would be subject to criminal punishment according to Alabama state law.
Right To Redeem
The debtor must be notified of his or her right to redeem the vehicle. The right to redeem means that the debtor has the right to pay the amount due in order to retrieve the vehicle and prevent it from being sold. If the bank or lending institution fails to notify the debtor in writing of his or her rights to redeem the vehicle and the amount due in order to do so, the creditor is in violation of the law and is subject to fine. If the debtor chooses not to redeem the vehicle, any profit that is made upon the sale of the vehicle, less any balance due and costs incurred, must be paid to the debtor. If the bank or lending institution sells the car for less than was owed, the creditor is then responsible for the balance due.
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Writer Bio
Rebekah Worsham began writing professionally in 2007 and has been published on eHow. She has expertise in the fields of law, parapsychology and the treatment of drug and alcohol addiction. She holds a degrees in law from Beckfield College.