Repossession Laws in Illinois

How Many Payments Can I Miss Without Risking a Repossession in Illinois? 

In Illinois, you could technically lose your car after missing just one payment. State law allows lenders to repossess a vehicle as soon as you’re in default on your loan.

This is because an auto loan is a type of secured debt. The car acts as collateral for the loan, which gives the lender the legal right to take it back and sell it if you don’t keep up with your payments.

That said, your loan agreement may give you a little more leeway. Some contracts include a grace period, which gives you a few extra days to make a payment after the due date without being considered late. Others may allow more than one missed payment before repossession becomes a risk.

To know for sure, check your loan documents. They’ll spell out how default is defined and whether you have a grace period before the lender can act.

Will I Be Notified Before the Repossession? How?

Under Illinois law, the lender doesn’t need to notify you before they seize your car. Once the creditor takes your car, they have to notify you within three days by mailing you a written notice to explain that your car has been repossessed.

The notice will also explain your options for getting your car back. There are two main options based on how much you’ve paid on the loan:

• If you’ve paid at least 30% of your loan at the time of repossession, you’ll get a notice of redemption. This notice says that if you can make the missed payments and pay the cost of repossession within 21 days, you can get the car back. 

• If you’ve paid less than 30% of the loan, you have an opportunity to purchase the car before the lender sells it. To do this, you must be able to pay the loan in full, along with the repo fees. 

You’ll have an additional 21 days to send an answer to the lender explaining why your car shouldn’t be repossessed. The lender can disregard your answer if they disagree.

How Can I Prevent a Repossession?

The best way to prevent repossession is to stay in touch with your lender and work out a solution before you fall behind. Many lenders are willing to grant an extension or set up a new payment plan if you reach out early. They’re much more likely to help if you call before you’ve missed payments.

What Can Repo Companies in Illinois Do? 

Once you’re late on a monthly payment, the auto lender or a repo agent they hire can take your car. Illinois law doesn’t require the repo company to send you any notice before repossessing your car.

That said, repo companies must follow certain rules.

• They can't enter your home or garage to take your vehicle without your permission.

  • But they can take the car from your property if it’s outside in the yard, driveway, or on the street. They can also take it from a public place like a parking lot.

• They can’t breach the peace by using or threatening violence.

• They can't trick you.

  • For example, they can give you a fake recall notice that tricks you into taking your automobile to a repair shop and then seize your car when you take it in. But if you voluntarily take a car in for a real repair, they can repossess your car at the shop.

If you believe a repo company has broken the rules, it’s a good idea to talk to an attorney about your options. They can advise you on whether you have a claim against the repo company or the lender.

Just as repo companies aren’t allowed to breach the peace, you can’t either. That means you can’t use force or threats to stop a repossession. Trying to block the repo agent could put you in danger and even lead to criminal charges.

Finally, remember that in Illinois, repo agents are required to have a license. If someone comes to repossess your car, you can ask them to show proof of their license.

What About the Personal Property in My Car? 

If you think your car might be repossessed, it’s a good idea to remove your personal belongings ahead of time. That way, you won’t have to go through the extra hassle of retrieving them later.

If your car is taken with your items still inside, the notice you receive after the repossession should explain how to get your property back. The repo company must set up a time for you to collect your things, but Illinois law doesn’t say how long they have to hold onto them.

If the repo company refuses to return your property or makes it difficult to retrieve, contact your lender for help.

What Happens After a Repossession in Illinois? 

After your lender takes your vehicle, it will be usually sold at a public auction. The notice that you receive after your car is repossessed will give you the details of the auction. You have a right to purchase the car up until the auction. 

If someone purchases the car for less than what you owe you have to pay the balance that remains after the sale. This balance is known as the deficiency balance. If your loan is upside-down, which means you owe more than the car is worth, you’re likely to have a high deficiency balance.

The deficiency balance includes what’s left on the loan and the costs of repossession (including lender’s fees, storage, towing, etc).

The lender is required to sell the vehicle in a commercially reasonable manner. This means the lender must properly advertise the sale for the repossessed vehicle and hold a fair auction.

Do I Still Owe After a Repossession in Illinois? 

You’ll likely have to pay money after the lender sells the car. You’re responsible for what’s left on the loan after the sale, along with any associated costs in the repossession process.

You can minimize these costs by avoiding the repossession altogether and voluntarily surrendering your car to the lender.

In a voluntary repossession, you give your car back to the lender after you default on the loan but before the vehicle is repossessed. This doesn’t mean you won’t have to pay a deficiency balance, but it does mean you’ll pay considerably less in extra fees since the lender won’t have to hire a repo company.

Can I Get My Car Back After a Repossession in Illinois? 

You can purchase your car until it’s sold at auction. If you’ve paid at least 30% of your loan when the car is seized, you have 21 days from the date of repossession to pay back the missed payments.

If you haven’t paid 30% of your loan or you don’t make the past payments in the 21 day period, you’ll have 21 days to pay off the loan in full to get your car.

Where Can I Find More Information About Repossession Laws in Illinois? 

• Illinois Legal Aid Online provides information on car repossession and helps clients deal with wrongful repossessions.

• The Lawyers Trust Fund of Illinois provides legal aid and can help represent you in repossession cases.

• Illinois Code on Repossession outlines what regulations repo companies must follow in the state of Illinois.