Car Repossession

Generally, the 1st month you are late on your car payment, the lender can start the repossession process.
There is usually a section in your payment agreement or contract that says the lender can take the property back if you fall behind in your payments.

Your payment agreement might contain a section that lists your car as collateral if you don’t repay your loan.

Will I get notice or a chance to catch up on my payments?
After you are 10 days late on your payment, the lender must send a Notice of a Right to Cure in the mail (unless your lender is a credit union).

This notice should give you 20 days to repay what you owe them before they can take the car.

If you can bring your payments up to date, the default is cured and then you can make regular monthly payments again.

Note: if you get behind on your payments again, they do not have to send you another Notice of a Right to Cure.

Can a lender take the car from my property?
Lenders can use self-help and tow your car from your driveway, the street, or your workplace, as long as it is a peaceful removal.

Is there any way to stop the repossession other than paying?
If you can show that there was misrepresentation or other deception in the purchase or financing of the car, you have the right to file a lawsuit and ask the court for a restraining order to keep the lender from repossessing the car until the lawsuit is over.

What about my things left in the car?
Your personal possessions in the car are still your own. You can contact the tow company or the lender to ask where the car is now located and set up a time to get your things out.

It is not required to sign a release to do this! Remember to get your loan paperwork out of the car too.

What do they do with the car after they take it?
If they take your car, then the lender will send you a Notice of Sale with what they plan to do with the car. By law, the lender must send a Notice of Sale or disposition.

To redeem your car and stop the sale you might have to pay all of the late payments. You are usually given 10-14 days to do this.

Then, the lender will sell the car in a “commercially reasonable” way and apply the money to your loan.

Once they have my car, I don’t owe them any money, right?
Sometimes the money from the sale of the car does not pay off the entire amount of the loan. The remainder is the Deficiency.

If you do not pay the deficiency amount that is left after the sale, the lender can sue you in court for that amount. You have the right to challenge the lawsuit with any defenses you have. For example, if the debt was previously settled and paid or if the statute of limitations for suing has run out.

If the lender wins the lawsuit and gets a judgment
against you, it can go on your credit report.

Resources
For more information about car repossessions and other legal issues:
LawHelp.org/SC

To file a complaint with state government:
South Carolina Department of Consumer Affairs

For general questions
about consumer education:
Consumer Financial Protection Bureau

If you would like private legal counsel:
SC Bar Lawyer Referral Service
Toll-free: 800-868-2284

South Carolina Appleseed LJC

Federal Trade Commission

For loans that are with credit unions:
National Credit Union Administration

National Consumer Law Center
National Association of Consumer Advocates

Additional information may be found at:
LawHelp.org/SC
South Carolina’s guide to free legal resources

This brochure was prepared by South Carolina Legal Services and is provided as a public service.
Copyright retained by South Carolina Legal Services
Printed April 2005