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vehicle repossession Georgia
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repossession laws in Georgia

When you finance or lease a car, truck, or other vehicle, your creditor or lessor holds important rights on the vehicle until you have paid off your obligation.  These rights are established by the contract you signed and by state law.

If you fail to make payments on time or default on your obligations under the contract in any way, the creditor or lessor may have the right to repossess your vehicle.

O.C.G.A. § 10-1-36[1] provides the respective rights of the buyer and seller following the repossession of a motor vehicle sold under a retail installment contract.

O.C.G.A. §§ 44-12-131 and 44-12-138 cover repossession of motor vehicles following a title pawn transaction.

Vehicle Repossession Laws in Georgia

When a borrower takes out a car loan, or leases a car, they will sign a loan agreement to pay back the loan in installment payments. During this period, the lending company is the one who actually owns the title to the car, not the borrower. If at any time during the agreed payment period the borrower defaults on the loan, or falls behind on payments, the lender has the right to take the car back.

How Many Payments Can You Miss Before Your Car is Repossessed?

There  is no set time limit on when your car can be repossessed if you have defaulted on your loan. Technically, when you are even one day late with your car payments you are in default of your loan agreement. Do not avoid calls or letters, speak to your lender about your financial situation and be honest.

Will I Be Notified Before the Repossession? How?

Under Georgia state law, the auto lender can seize the borrower’s car anytime after a payment is late. They don’t need to give you notice. Once your auto vehicle is taken, the lender has to mail you a notice within 10 days explaining that your automobile has been repossessed. The notice will explain how you have to pay off the loan and repo fees if you want your car back. It will also tell you how long you have to get your car back.

Once that period has ended, the lender will usually sell it through an auction. It is important to note that most of the time, the lender does not receive the full amount that was owed on the vehicle at the auction so this means you will still be on the hook for the balance still owed on your auto loan.

This balance left over is referred to as the “deficiency amount”.  Your lender will expect you to pay the deficiency amount and will sue you to collect for it.

When you fall behind on your car payments your credit report will also take a hit in that the missed payments will be noted. If your car is repossessed then the repossession will also show up on your credit report for 7 years.  Once the car creditor sues you for a deficiency judgment that will also be on your credit report.

Voluntary Repossession of a Vehicle in Georgia

Surrendering your car with a volunteer repossession in Georgia is an option if you know that you can no longer afford the payments. It saves you the embarrassment of the repossession company taking the car from your home or job however it will still report as a repossession on your credit report and the creditor will still seek a deficiency balance against you on the debt.

What Can the Repo Company in Georgia Legally Do?

Although your car company can repossess the car themselves, they usually hire a repo company to handle it. The repo company doesn’t need to provide any notice before seizing your vehicle, but they are required to follow the law:

  • The repo company cannot enter your home or garage to take the vehicle without your permission. They are allowed to go onto the property to get your car if it’s parked somewhere such as the driveway or the carport.

  • In Georgia, the repossession company is not allowed to breach the peace when repossessing your car. This means they aren’t allowed to use or threaten violence.

If a repo company doesn’t follow the law, you should seek legal advice on how to take action against the repo company and lender.

What About the Personal Property in My Car?

If you know a repossession could occur or that it’s definitely going to happen, make sure you take your personal property from the vehicle. This will prevent you from having to track down your belongings after the car is repossessed.

If the repo company has seized your car with your personal property in it, the notice you receive after your car is repossessed should tell you how to get your belongings. The repo company must give you an appointment to get your stuff.

Unfortunately, many times we hear from clients that when they go to get their belongings back, they are missing and the client has no way to prove that the items were there in the first place.  Try to avoid having your car picked up at all costs.

Can I Hide My Car To Avoid Repossession?

It is illegal to hide your car with the intent to defraud the bank. If you physically prevent the repo company from taking your car or use the threat of violence to stop repossession, you’re breaking the law.

If unable to repossess your car without breaching the peace, the lender may then pursue judicial involvement to obtain its property and seek criminal charges against you. Don’t play games though with the car creditor. You could end up with a criminal warrant issued against you!

How Does Filing for Bankruptcy in Georgia Help Car Repossession?

Bankruptcy can be very helpful in alleviating financial hardship by protecting property that may be in danger of repossession. Filing Chapter 7 or Chapter 13 bankruptcy will immediately stop repossession of your vehicle under the “automatic stay” provision of the Bankruptcy Code.

The automatic stay is an order from the Bankruptcy Court issued to all creditors as soon as a bankruptcy petition has been filed. It prevents creditors from making any further collection attempts against you or your property, which includes repossession of you vehicle.

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