Lenders repossess vehicles for non-payment of the loan and sometimes for other reasons. There is no notice requirement of a lender’s intention to repossess a vehicle from a borrower who is delinquent on the account. But after the car has been repossessed, the lender must give notice of its intent to sell or dispose of the vehicle. That notice must inform the consumer of their rights and various other matters. In most cases, the lender must offer the consumer a chance to reinstate the contract by paying all delinquent payments and the repossession fees. In certain circumstances, the lender is not required to permit the consumer to reinstate the contract; instead it may sell the vehicle unless the consumer can pay off the unpaid balance of the loan in full within a few days. Once the vehicle is sold, the lender must send an accounting to the consumer. In cases in which a deficiency balance is owed, the lender will attempt collection and if it is not paid, will send the debt to a collection agency. If the agency is not paid, a lawsuit may be filed.

In 1998 KABO attorney Andrew J Ogilvie represented the consumer in the case of Bank of America v Lallana 19 Cal. 4th 203, in which the California Supreme Court ruled that lenders in repossession cases must strictly adhere to the notice requirements set forth in the Commercial Code and the Automobile Sales Finance Act. The Court held that if a lender does not comply with the notice requirements, it has no right to seek any deficiency.

If your vehicle was repossessed and sold, and you are being asked to pay a deficiency balance, you may want an attorney to determine what rights you may have. Please call 1-800-243-4566 or contact us online for a FREE Case Review.