What Are the Legal Implications of Property Repossession?

Unfortunately, with the current economic crisis, more and more people are struggling to meet some or all their monetary obligations, and property repossessions in Texas are on the rise.

If you find yourself behind on your payments, understanding your rights and the legal implications of property repossession are vital to protecting your financial future. It may also be time to consider contacting a debt attorney.

Will I Get an Advance Notice?

If personal property, like a vehicle, acts as collateral for a secured loan, the creditor is legally allowed to repossess it without filing a lawsuit and without any advance notice.

Under Texas law, if you miss even one payment, repo agents can seize your car the next day if the creditor chooses to do so. They are under no legal obligation to give you a warning or obtain a court order.

How to Deal with Repo Agents

Therefore, it is best to avoid confrontation with a repo agent. A better course of action would be to contact your finance company and try to work out a deal.

At the same time, it’s essential to know that a repo agent cannot enter your house or closed garage without your permission, and they must avoid a Breach of the Peace when repossessing property. According to the Texas Business and Commerce Code 9.609, here are some examples of actions that constitute a Breach of the Peace :

  • Using physical force
  • Threats
  • Breaking into a locked house, through a locked fence, or into a garage
  • Destroying or damaging property

If the repo man doesn’t abide by these regulations, the creditor may be legally liable. If the repossession agent’s behavior makes you feel threatened or intimidated in any way, you may want to call the police.

How Can I Recover My Property?

However, keep in mind that you must do this before the creditor puts the property up for a sale or auction. If you don’t pay, the creditor will sell the property to cover the debt. Repossession, storage, and sale costs will be deducted from the proceeds.

If the sale proceeds are not enough to cover your debt, the creditor may file a debt lawsuit against you and demand that you pay for the rest. If the property sells for an amount exceeding the surrounding costs and debt combined, the creditor is legally bound to return anything over the full collection and costs balance.

What If I Have Personal Possessions in the Vehicle?

You might have personal possessions, like a mobile phone or documents, in the vehicle. A creditor cannot withhold any property left in the vehicle and is under a legal obligation to return it to you upon request.

After the Repossession

Although you are not entitled to any written notice before repossession after the repossession has taken place, you should receive:

  1. A notice from the lender, within 15 days, stating if there were personal possessions in the vehicle and specifying how you can claim them.
  2. A notice, within five days, by certified mail from the tow truck operator listing the daily storage rate and any other charges incurred due to the tow.
  3. A written notice from the lender notifying you of the upcoming sale of your property, no less than ten days in advance.

Will This Affect My Credit Score?

A property repossession will stay on your credit report for seven years. It will negatively impact your credit score and could make it difficult for you to qualify for other loans.

What Happens If I File for Bankruptcy?

If you file for bankruptcy, the court can issue an Automatic Stay, which will stop all property repossession actions, all debt collection against you, and any threats or harassment from your creditors. Filing for bankruptcy may enable you to keep your property and work out a feasible payment plan.

Ciment Law Firm: Bankruptcy Attorney in Katy, Texas

If your property has or will be repossessed, you need an experienced debt, bankruptcy, and foreclosure attorney on your side. At Ciment Law Firm, we’ve handled consumer protection, debt collection defense, and bankruptcy cases for over 15 years, and we’re happy to provide legal debt assistance guidance.

Based in Katy, Texas, we also operate in Dallas, San Antonio, Austin, and El Paso by appointment. Call us at (281) 937-3949 for a free consultation.


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