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The rights of creditors in the vehicle repossession process

When a consumer signs a car loan, he or she must sign a contract that gives the creditor the right to take action in the event the signee falls behind on his or her payments. The fine print often spells out these rights, but consumers rarely take the time to read all the way through the contract. It is often shocking for people to learn that a creditor can repossess one's personal vehicle after even just one missed payment.

In the event a Florida creditor wants to move forward with the vehicle repossession process, it must follow a specific process. While creditors do have repossession rights, there are limits to what they can do. It may be helpful for you to review both consumer rights and creditor rights as you move forward with the most appropriate course of action on behalf of your company. 

How the process works

While most consumers do not truly understand how the repossession process works, creditors do. However, it is always beneficial to review the process and understand how to accomplish your goals within the parameters of the law. A review of the following information may be helpful:

  • A creditor does not have to warn a consumer they are initiating the repossession process.
  • Creditors have the right to sell the loan to a third party, which could pass the right of repossession to the purchasing party.
  • Creditors must adhere to the original terms of the loan agreement or any written changes agreed upon by both parties.
  • After repossession of a vehicle, a creditor can then sell it to pay for the amount owned by the consumer.
  • A creditor cannot keep or sell any personal property in a vehicle at the time of repossession.

Consumers may file for bankruptcy to enact the automatic stay, which will limit or eliminate your right to repossess the vehicle. It is in the interests of your company to be aware of your rights and do the appropriate homework before moving forward with anything that could potentially violate the rights of the person who has the vehicle.

Protecting creditor rights

Creditors can face financial loss and legal repercussions if they overstep their bounds or violate the rights of a consumer in any way. It is beneficial to learn more about the right course of action as you move to protect the rights of your company and collect on debts owed to you.

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CreditorCollections, A Law Firm

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