What You Need to Know About Car Repossession in Pennsylvania
If you’ve begun missing car payments, then chances are a repo person will be dispatched to show up for your car pretty soon. Technically, the creditor has the right to do this if you miss even a single car payment. In reality, they often wait until you are about three payments behind. After all, they must adhere to all repossession laws in PA to avoid legal action.
Usually you know it’s coming. You get a Notice of Default in the mail. Don’t be embarrassed: it can happen to just about anyone.
But it’s important to know what the repo person can or can’t do. The Philadelphia repossession attorneys at Sadek Law are here to help you fully understand what you and repossession agents can and cannot do in certain situations. To schedule a free consultation with us about your situation, please call our office at 215-545-0008.
Repossession Laws in PA
Understanding Pennsylvania repossession laws as they apply to debtors and repossession agents is extremely important. Not only can this understanding help you avoid making costly mistakes, but it can also protect you from unlawful repossession actions. The attorneys at Sadek Law have extensive experience handling repossessions and repossession agents. We’re here to educate you on your rights as a consumer.
In Pennsylvania, if a consumer fails to make a payment while in a loan agreement, they will be in default of that agreement. If the creditor has a security interest in the vehicle, they may repossess it at this point. However, there are certain actions that creditors cannot take, which we’ll cover in a later section.
Hiding a Car from Repossession in PA
Under Pennsylvania law, hiding a vehicle from a repossession agent isn’t a good idea. It’s a much better idea to calmly tell the agent that they cannot come onto your property and take your vehicle. Attempting to hide it may result in a fraud charge, which is far from ideal.
How Does a Repossession Work in Pennsylvania?
Technically, if a creditor has a security interest in a vehicle, and the borrower defaults on their loan, the creditor can attempt to repossess the vehicle anytime. Most creditors don’t attempt repossession immediately, but some do. They often send a repossession company to talk with the debtor about repossessing the vehicle.
If the lender ends up repossessing the vehicle, they usually sell the car to recoup their losses. They have a legal right to do this as long as they adhere to all related repossession laws. To fully understand the parameters surrounding a repossession, it’s important to carefully read your loan agreement. This agreement should outline when the lender has a right to repossess the car.
How Long Before a Car Is Repossessed?
It depends on the terms of your car loan agreement. Some agreements state that a simple lapse in insurance is enough to justify a repossession. Other agreements say that defaulting on your loan payment for only one day is enough. However, many lenders do not immediately attempt repossession. They may wait until the borrower is further into default before attempting repossession.
Statute of Limitations on Car Repossession in PA
Pennsylvania’s repossession laws state that collections in breach of contract cases, such as defaults on loan agreements, have a statute of limitations of 4 years. This means that, after the lender knew or should have known about the breach, they have 4 years to attempt to repossess the vehicle. They cannot attempt repossession after the statute of limitations passes.
How Long Does It Take to Repo a Car?
The physical repossession process itself usually takes a few hours at most. However, how soon the lender can legally attempt repossession depends on the terms of the loan agreement.
How Much Are Repo Fees in Pennsylvania?
It depends. To tow, store, and auction a repossessed vehicle, a creditor must pay certain fees. After a borrower’s vehicle has been repossessed, these fees often fall to them. Repossession fees can be as high as a few thousand dollars if the car stays in the repossession lot for a long time.
What If I Have a Deficiency Balance After Auto Repossession?
If you have a deficiency loan balance after auto repossession, it means you still owe money to the lender after the car is sold. The lender may pursue collection actions, such as hiring a collection agency, filing a lawsuit, or reporting the debt to credit bureaus, which can negatively impact your credit score.
What Can a Repo Man Not Do in Pennsylvania?
As a debtor, it’s important to understand what a repo company can and cannot do when attempting to repossess your vehicle. First, creditors cannot repossess your property unless they have a written security agreement signed by you. This agreement clearly identifies which property they can take if you don’t pay. If a repo company breaches the peace or violates any laws while attempting to repossess your car, they could face legal action.
They can’t damage your property.
The repo person can take your car from just about any location, but he or she must do it peacefully. That means they can’t just break into your locked garage to take the car. They cannot damage your personal property in the process of repossession.
They can’t threaten you.
The repossession agent is not allowed to claim they’re going to send you to jail (they can’t). They’re definitely not allowed to make threats of physical violence. If they threaten you or breach the peace, you can file a complaint with the Pennsylvania Department of Banking and Securities. Such a complaint may lead to the repossession company having its license revoked.
They can’t take other pieces of property.
They cannot, for example, steal your RV because they can’t get to your car. Or walk in and order you to give up your furniture. Or walk into your home and grab your computer.
Remember that a future lawsuit could mean losing some assets to your creditors. They can attach to things like your tax return, and in some cases, they gain the right to access your bank account.
They can report the defaulted loan to the DMV and your insurance company.
They do this to make it harder for you to get insurance and license plates. After all, as far as the creditor and their repo person are concerned, you’re driving around in the bank’s car, not your own.
My Car Is Up for Repossession, What Can I Do?
If your car is up for repossession, contact your lender immediately to discuss your situation. You may be able to negotiate a payment plan, deferment of loan payments, or loan modification to avoid repossession. Consider refinancing the loan or seeking help from a repossession lawyer. If repossession is inevitable, try to voluntarily surrender the car to reduce fees and potential damage to your credit score.
You don’t need to hide the vehicle.
And you shouldn’t. First off, the repo person can’t take your car if you calmly explain he or she cannot come onto your property and may not take the car. And second of all, you can be charged with fraud, which is a criminal charge.
Note that all this does is buy you some time. At this point, you need to think seriously about filing for bankruptcy. Bankruptcy will put a stop to the repossession. You can file for emergency bankruptcy in Pennsylvania if you desperately need the benefits of the automatic stay.
But if you don’t, your creditor can take you to court, where a judge will order you to give up the car. And then you won’t be able to do anything about it without being in contempt of court.
The second reason you don’t want to hide the vehicle is this: as long as you’re making the repo person play hide-and-seek without just saying, “You may not take the car,” the more money he or she is charging the finance company. The finance company will turn around and pass all those costs on to you.
If you end up going to court to receive a judgment that says you have to give up the car, you’ll end up paying those court costs, too.
You can sue if the repossession agent uses force or threats.
If the repossession professional uses force or threats, you can sue.
You will need to document the event, take pictures of any damaged property, and gather the names and numbers of witnesses.
If your suit is successful, your damages could amount to 10% of the loan’s principal, plus finance charges. Sometimes, the judge will rule that the creditor may no longer attempt to repossess the car.
What if you just let the repo guy take the car?
That’s not very helpful either. If you lose your car and your means of getting to work, you don’t even get out of your debt. Instead, the creditor will sell your car at auction (you must get written notice of where and when it happens).
The bank will then take the difference between what the car sold for and what you owe. The result is your “deficiency balance,” and they can sue you for that amount.
If you’re in danger of repossession, consider filing for bankruptcy.
Don’t just give up the car, either.
If you want to keep your car, stop creditors in their tracks, and end up with a clean slate, bankruptcy is the way to go. When you receive your discharge, you won’t owe anything else on the car, and the bank will never be able to contact you about it again.
If Your Car Gets Repossessed, Can You Get It Back?
Yes, you can often get your car back after repossession by paying the overdue amount, including any fees and costs related to the repossession, before the car is sold. Some states allow you to reinstate the loan by catching up on missed monthly payments. Alternatively, you might be able to buy back the car at the auction where it is sold. Check your loan agreement and state laws for specific options and requirements if you want to avoid repossession or get a repossessed car back.
How to Get a Car Back After Repo in Pennsylvania
If a buyer defaults on their loan and has their car repossessed, they have a few options for getting their repossessed car back.
- Redeem the loan
- Reinstate the loan
- Negotiate with the lender
- Buy it at the auction
Repossession FAQs
When Can a Bank Repossess Someone’s Car in Pennsylvania?
A bank can repossess someone’s car if the borrower defaults on the loan, typically after one or more missed payments. The specific terms of default and repossession rights are outlined in the loan agreement.
Can Repo Enter Private Property?
According to repossession laws in Pennsylvania, repo agents can enter private property to repossess a vehicle as long as they do not breach the peace, which means they cannot use force, threats, or break into locked or enclosed areas like garages. They can typically take the car from driveways or open areas.
Do You Still Have to Pay for a Car That Is Repossessed?
Yes, you still have to pay for a car that is repossessed. After repossession, the lender will sell the car and apply the proceeds to your loan balance. If the sale doesn’t cover the full amount owed, you are responsible for paying the remaining balance, known as the deficiency balance. Additionally, you may also be liable for any associated fees and costs.
Contact a Pennsylvania Repossession Lawyer at Sadek Law Today
At Sadek Law, we are committed to providing comprehensive legal support to help you manage and mitigate the impacts of your repossession situation. Whether you’re facing potential repossession, seeking to recover a repossessed vehicle, or exploring bankruptcy as a solution, our experienced attorneys are here to guide you every step of the way. Contact Sadek Law today for a consultation and let us help you regain control of your financial well-being.