Florida Repossession Collection Laws & Statute of Limitations

Florida laws give the lender the right to seize the vehicle when the borrower defaults by missing a required payment or as defined in the loan documents, as do most contracts that govern vehicle loans . This seizure (or repossession) of the vehicle must be carried out in full compliance with applicable Florida repossession laws. However, those laws give lenders a good deal of leeway in how, when and where repossession can take place.

The lender of a loan on which the borrower has defaulted may repossess the car or other vehicle from almost any property where it has been parked or stored when the borrower fails to make a required loan payment within 30 days of the loan’s maturity date (or any extension granted by the lender).

Florida repossession laws require the lender to first give the borrower a chance to surrender the vehicle at a mutually convenient time, date and place. If the borrower fails to respond, the lender is not obligated to issue any further notice regarding the time, date or place from which the lender intends to seize the vehicle. However, the car loan agreement itself may require the lender to notify the borrower that the contract is in default and even that repossession may take place as a result.

Under Florida law, only an agent who is licensed by the state to repossess vehicles may do so. Lenders must engage a licensed repossession agent at their own expense to carry out the repossession. Licensing requirements include one year of mandatory training or experience as a recovery agent intern or the equivalent, as well as at least 40 hours of professional training at a state-licensed school or training facility.

Licensed recovery agents are prohibited from carrying or using any firearm while pursuing repossession duties or tasks, regardless of whether the individual agent has a state firearm license of any kind. Carrying a firearm for personal protection or firing “warning shots” in an attempt to subdue a debtor will result in the revocation of the agent’s license.

The Florida statute of limitations for consumer debts with written agreements such as car loans is five years. In other words, the lender may not file suit or attempt other legal remedies (such as repossession) after five years have passed, as measured by the last date of activity on the debt.

While licensed repossession agents may lawfully enter the borrower’s property to seize a vehicle, they may not commit a breach of the peace while doing so. “Breach of peace” means causing actual damage or injury to a person or personal property, as well as any threat to use force.

The burden to avoid the breach of peace is on the repossession agent, not the borrower or property owner. For example, if the borrower verbally objects or attempts to physically prevent the repossession, the agent must withdraw or retreat from the confrontation. If retreat is physically impossible, the agent is permitted to use only an amount of force sufficient to defend against the attack.

Lenders who repossess vehicles that contain personal property must inventory that property in a written log. Title to that personal property does not switch to the lender, and the borrower has the right to recover it.

However, personal property that has been attached to the car is excluded from this general rule. For example, if a borrower installed a car stereo or luggage rack on the car, the lender is not obligated to return those items, and the borrower does not have the right to recover them.

A borrower may halt a car repossession by filing for personal bankruptcy under U.S. bankruptcy laws. After the proper filing of a Chapter 7 or Chapter 13 case, a borrower enjoys the protection of an automatic stay of all attempts to collect a debt, including the recovery of the vehicle.

What happens to the amount a driver owes on a car loan after the car is repossessed? While state laws on deficiency after car repossession can vary, it remains a legal and financial obligation for the borrower in Florida.

After the car is repossessed in Florida, it is usually resold or auctioned off. The borrower will still be liable for the difference between the amount owed on the vehicle and the price at which it sells subsequent to repossession. For example, if the borrower still owed $4,000 on the loan and the lender sells the vehicle for $2,500, the borrower is still responsible for the $1,500 deficiency.

If the borrower fails to pay the deficiency, the lender may file a lawsuit against the borrower. Such lawsuits generally ask the court to grant a deficiency judgment for the amount still owed, plus any fees associated with repossession and collection of the deficiency.