Louisiana law prohibits lenders from repossessing vehicles without a court order unless the debtor agrees to it. This is known as "voluntary repossession." Once a debtor signs an instrument surrendering the vehicle, he waives almost all his rights regarding the vehicle, although he still may be able to reclaim it if he can come up with the funds to do so.
In Louisiana, it is illegal to repossess a vehicle without a court order in most cases. The "secured party" contract, also known as a loan contract, or lease must state specifically that "Louisiana law permits repossession of motor vehicles without judicial process." In addition, the lease-holder must send the debtor a legal notice stating the intention to repossess the vehicle.
For both car leases and car loans, the debtor must sign a notice of surrender indicating that she voluntarily surrenders the vehicle. If she refuses to do so, the lender must go to court and get a repossession order.
Breach of Peace Clause
Louisiana lenders must not "breach the peace" when repossessing vehicles. They may not physically or verbally threaten the debtor or coerce him to sign the voluntary surrender notice. The debtor may refuse to allow the lender to repossess the vehicle, including refusing to allow the lender access to a garage where the vehicle is stored.
Sale of Repossessed Vehicles
If a debtor voluntarily surrenders her vehicle, he is presumed under Louisiana law to agree to the possible sale of the vehicle in order to recoup losses. The debtor may redeem the vehicle by paying all costs in full, including towing and storage costs prior to the sale, even if he has signed a voluntary surrender of the vehicle.
- towing truck image by Aleksandr Ugorenkov from Fotolia.com