How late can I be before repossession will happen?

We get asked this question a lot. I mean A LOT. There is no law that states your property cannot be repossessed unless you are a certain amount of time behind. You can be 1 day behind or 4 months behind. The lender is the one that decides when to take that action and they can take that action the moment you fail to fulfill the loan agreement you have with them. Different lenders have different policies and procedures. Know what your lender’s policies and procedures are regarding repossession now. Don’t wait to know what will happen because it more than likely will catch you by surprise. Hopefully you will never need to know their process and procedure for this – but the saying “knowledge is power” is true.

Most repos occur after two+ months of no payment, but there is NO LAW dictating a set time frame in MS.

If you are behind (or you think you will be soon) on your car or truck payment, you will be at risk of having your car repossessed. Your lender may be more lenient if you’ve had a lot of on time payments, but the more often you’ve been late, the sooner they might decide to repossess the vehicle.

What normally happens when you miss your car payment?

In most states, a lender will start the collection and/or repossession process the day after you miss just one payment, but most companies have some small grace period. It is common for lenders to not even charge a late fee until the payment is at least 10 days late, and most won’t even report it until it’s over 30 days late to the three major credit bureaus.

The collection and/or repossession process will start with the lender contacting you for information. If you then go past 30 days (and especially if you miss the next payment as well) – that’s where the process starts to speed up and you enter repossession, or “repo territory”. But again, every lender is different. We are speaking of the most common practices in this blog.

How does repossession work?

Most of the time your lender will contract a third-party “repossession agency” that specializes in this practice. That company will use all the information it can get – your home and work addresses, etc – to track down the location of the vehicle and proceed to tow it to a secured (usually gated) lot. They do not need your car keys to tow your car.

The repossession agency will then charge your lender for towing the vehicle, along with a daily storage fee (usually around $25 to $75 per day). Unless you left your keys in the car, the repossession agency will also contract a locksmith to make a new keys – then charge your lender for that, too. When all is done, you’ll owe your lender anywhere from a few hundred dollars to a few thousand dollars on top of your normal vehicle note to cover all these charges. Which, by the way, you’ll be liable for whether you get your car back or not.

Know your rights vs. the lender’s rights.

In almost every instance, your lender does not need a court order to attempt to repossess your car. That is definitely true in Mississippi (Universal Citation: MS Code § 75-9-109 (2013)) You can view a list of every state’s automobile repossession laws here, but generally speaking, your lender (or a company it hires) has the right to come onto your property and take the vehicle so long as no one commits a “breach of the peace.” That means its representatives can not break into a locked garage, break through a locked gate or otherwise use physical force against you or your property to take possession of your vehicle. They can follow you to work, or the grocery store, etc and wait until you leave your car unattended and then repossess the car. Some lenders have begun to use GPS devices so that, as a part of your loan agreement, they know where the vehicle is at all times.

Some lenders are even beginning to utilize electronic disabling devices. When you got your car loan, did you agree to have a device on it that prevents it from starting (sometimes called a “kill switch”) if you don’t make your payment? Depending on your loan agreement and your state’s laws, using a kill switch might be considered the same as a repossession or be considered as a breach of the peace. How your state rules on the use of these devices affects your rights. Contact your state attorney general if you have questions.

Don’t let things go that far.

If you know you will be behind or the moment you get behind, look into your options. It is always better to be fully aware of what you can and cannot do before things are done TO you. You take control of the situation. You have options. Don’t let the fight be to get your vehicle back by not taking action now. Keep your efforts on paying for the vehicle in a manner you can afford. Call an attorney if you need a free consultation on how to maintain control of your vehicle loan situation.