At one time or another, we may have all fallen behind on vehicle payments. It can happen to just about anyone. In Pennsylvania, vehicles can be repossessed if a debtor gets behind in payments, referred to as defaulting on a loan.
When the debtor bought the vehicle, they signed a contract to pay the stated amount, by a certain date and that the vehicle was used as collateral. The fact that the vehicle is collateral means that the lender has the legal right to take the vehicle back if the buyer defaults on payments. No prior notice is required in Pennsylvania before the repossession of a vehicle.
Facts About Repossession in Pennsylvania
If a buyer is in default on their vehicle payments, and the lender wishes to repossess the vehicle, they may not breach the peace while doing so. An example is if a vehicle is parked in a locked garage or behind a gate, the repossession company cannot enter unlawfully to reclaim it.
However, if the vehicle is parked on the street, in a public parking lot or even in the driveway, the repossession can move forward. If any personal effects are left in the vehicle, the lender must advise the debtor of such and they must also return the license plates to the registered owner.
It is important to know that if the lender does breach the peace while repossessing a vehicle, they may lose the right in court to sue the debtor for any deficiencies arising when the vehicle is sold.
After a vehicle has been repossessed, the lender typically schedules a sale of the vehicle to recoup their money. In Pennsylvania the law mandates the lender must let the debtor know about the sale in writing and provide the day, date, time and location.
A debtor in Pennsylvania also has the right to redeem a repossessed vehicle if they can pay the entire amount of the loan in advance of the vehicle's sale. The debtor must also pay any fees racked up during the repossession process, such storage fees and attorney's fees. If the car was sold, the debtor cannot redeem it.
If there is any deficiencies after the sale of the repossessed vehicle, debtors must pay for those. That means that if the lender does sell the vehicle, but is not able to get enough to pay off the balance of the loan, a deficiency is created. In Pennsylvania, lenders may then sue the debtor for that amount.
Each repossession situation is different and it is best to consult with an experienced attorney at Melaragno, Placidi & Parini to find out what your legal rights are and what options you may have to keep the vehicle if you wish.