In Florida, lenders for car installments are granted the legal right to repossess a car if the borrowers cannot pay back the loan. However, a car loan is a secured debt, so they’re entitled to take over the vehicle.
As a borrower, you still have the right to process the car back. After all, you have paid part of the total loan as agreed. Of course, if your current vehicle has the potential to be repossessed by your creditor, it’s best for you to understand repossession laws and what your legal rights are under these laws.
Okay, let’s get started!
About Florida’s Repossession Laws
Florida’s repossession law allows the lender to repossess your car without prior notice if you miss the monthly or agreed-upon payment. A creditor can take your car back, even if you only miss one payment, especially if it is past due.
According to the law, the creditors still have important rights to ownership of the car before the debtors can pay off the payment in full. These creditor rights are determined under state law and under the contract you signed.
Even without involving the court, Florida’s repossession law gives them restrictions when taking over the vehicle. Well, creditors are not allowed to use verbal and physical violence or enter your properties without permission.
But if you’re not cooperative when they repossess your car and even if you tend to use violence against them, they may apply to the court for permission since they cannot peacefully confront you.
After repossessing your car, the creditor must give you written notice within 45 days to avoid a breach of peace during the repossession.
Keep in mind that each state has certain rules for implementing repossession laws. In Florida, especially, the law is considered beneficial to the creditors because they can legally take over the car from the debtor after they fail to pay the loan.
What Happens After the Creditor Repossesses Your Car?
After repossessing your car, the creditor will have a few options for your vehicle, such as:
- The creditor will send you a written notice within 45 days after repossession. It will notify you of your rights to recover or redeem your car. If you redeem your car, you should pay the deficiency balance, late fees, and towing fees.
- The creditor has the right to sell your car if you don’t redeem it.
- The creditor should notify you via mail whether your car will be sold at a private sale or a public auction.
It’s important to note that if your car is successfully sold and the price exceeds the amount you owe on your loan, you’re entitled to the excess.
And what if your car sells for less than its market value? The court will consider the sale of your car to be unreasonable if it sells for less than it is worth. If it happens, you could:
- File a lawsuit against the creditor for losses.
- Buy the car back. If you choose this, you will have to pay the entire loan debt plus repossession costs.
- Pay the loan amount due plus any fees the creditors have incurred.
- If the creditor collects the loan deficiency, you can defend yourself by disclosing the fact that your car was sold below the average market price.
If any of your belongings were left in the car when the repossession agent carried them out, they’ll inventory yours and give you a time limit to claim them.
How to Prevent Repossession in Florida
There’s no doubt that dealing with repossession agents is very energy-consuming. Of course, you do not want to, do you?
Before it is too late, you must immediately take action when your car has the potential to be repossessed by creditors. Sometimes, unexpected financial problems occur. The sooner you prevent repossession against your car, your condition will be better.
There are several steps you can take to stop repossession in Florida, including:
Way 1: Reach out to your creditor
Even if you don’t know what will happen, talking to your creditor directly is the first step to preventing repossession. Of course, you have to honestly explain your condition and why you haven’t been able to pay the car loan.
If they are willing, you can renegotiate with them regarding the loan payment plan, such as:
- Recreate a new payment plan that you can reach.
- Decrease your monthly payments with the longer term.
- Realistically plan missed payments over a certain period.
- Voluntarily surrender your car in exchange for a reduced balance if the car sells.
When meeting with creditors, be sure to bring important documents, such as loan agreements, payment history, and proof of income. These will make it easier for you to maintain your position when negotiating with them.
Way 2: File for bankruptcy
Filing bankruptcy is a good way to prevent repossession, especially when you are experiencing financial difficulties. To make it easier, you can ask for professional help to tell you your rights in detail or help you when negotiating with creditors. They may also provide additional options to save your car.
Way 3: Pay the amount of the past-due loan
If you have missed one or more loan payments, you can try to pay only the loan that is due. Plus, you may have to pay any fees incurred by creditors. This is a quick way to prevent repossession.
By taking one of the more recommended ways above, you can really stop repossession against your car, so you’ll get the benefits of this action.
What Benefits Are There When Trying to Stop Repossession?
Not losing your car is the main benefit you can get when you try to stop repossession. When your car is potentially repossessed and you take the right steps, you’ll get other benefits, such as:
- There is no need to pay repossession fees to the creditor.
- Keep your privacy safe.
- Be able to control repossession time.
- Protect your credit score and keep it high.
- Have several options before you decide on a move, such as modifying the loan, setting up a repayment plan, or even selling your car to pay off the car loan.
Okay, those are the advantages you may get if you try your best to prevent repossession of your car.
Why Weren’t You Asked for Extra Money After Repossession?
Although your car was repossessed by the creditor since you failed to pay your car loan, they will not charge you for additional money if your loan was under $2,000 when you stopped paying it.
The creditor may charge you extra fees if you owe more than $2,000. But you should not pay it if they did something wrong when taking your car, such as committing violence or selling your car without telling you first, particularly selling it under the average market value.
After a repossession, Do You Still Have a Car Loan?
When your car was repossessed by the creditor, it doesn’t mean you don’t have the responsibility to pay it anymore. However, the creditor will tell you after the repossession whether you will redeem your car.
If you ignore them, they may decide to sell your car. If the proceeds from the sale do not cover your car loan plus the fees that the creditors incurred to take your car, you will need to pay the shortfall.
Well, the best is voluntary repossession. If you repossess your car voluntarily, it can help you with repossession fees and other costs, even if you still owe money on the car loan.