Repossession Laws in Louisiana

Many people need a loan to buy a car. When you finance a car through a lender, you sign a contract agreeing to make regular payments. That contract also gives the lender the right to take the car back if you stop making payments. This is because the car serves as collateral for the loan. Collateral is something of value the lender can take if the loan isn’t paid.

This process is called repossession, and it’s legal in every state. But each state has its own rules about how repossession works. In Louisiana, state law outlines what lenders are allowed to do and what rights you have if your car is at risk of being repossessed.

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

In Louisiana, your lender can start the repossession process after you miss two payments in a row. If you make payments more often than once a month — like every two weeks or weekly — you’re considered in default if 60 days have passed since your last payment.

📄 That said, your loan agreement may include more specific terms about when you're officially in default. It's a good idea to read your contract carefully so you know exactly what to expect if you fall behind on payments.

Will I Be Notified Before the Repossession? How?

Under Louisiana state law, your lender (also called the secured party) must send a written notice to your last known address prior to repossessing your motor vehicle.

This notice of repossession must contain all of the following information:

• Your name

• Your last known address

• A description of the collateral (car)

• The statement: Louisiana law permits repossession of motor vehicles upon default without further notice or judicial process.

Depending on the terms of your loan agreement, this may be the only notice you receive. The law doesn’t specify the number of days the lender must send the notice prior to the repossession. 

How Can I Prevent a Repossession?

You can prevent repossession in Louisiana by:

• Filing bankruptcy: By filing either a Chapter 13 bankruptcy or a Chapter 7 bankruptcy, you may be able to keep your car. 

• Speaking with your lender: When you speak with your lender and explain that you’re struggling to make your car payments, you may be able to work out a new payment plan and keep your motor vehicle. 

• Purchasing wisely: When buying a car, don’t agree to a payment that is a stretch for your budget. Do your best to make a down payment, and try to find a low-interest-rate loan. These steps will also help prevent you from becoming upside-down on your loan.

Should I Voluntarily Surrender My Car?

If you can no longer afford your car payment, you can return it to the lender or dealership where you purchased it. This is called a voluntary surrender or voluntary repossession.

Many lenders will ask you to sign a form that states you’re giving the car back when you do a voluntary repossession. You're not required to do this, but it can help you avoid paying the repossession fees. This will reduce the deficiency balance or the amount you have to pay after the lender sells your car. More on this below.

What Can Repo Companies in Louisiana Do?

🪪 Louisiana repossession laws require repossession agents to get a license from the state of Louisiana’s Office of Financial Institutions.

The repo company may only proceed with a repossession without going through a judicial process or getting a court order if they’re able to do so without a breach of the peace. This means that they can’t use force, threats, or intimidation while repossessing your car. They also can't break locks or force through fences to retrieve the car. 

🚗 While they can take your car from any public space, they can only take the vehicle from your property if they’re able to do so without breaching the peace.

You’re also not allowed to commit a breach of the peace during the repo process.

What About the Personal Property in My Car?

If you’re worried that your car may be repossessed, it's best to remove any personal property you have in the car.

If you have property in the car when it's repossessed, you have 10 days to contact the repossessing creditor and demand the return of your property. The creditor is required to return your items immediately.

🗓️ If you don’t contact the creditor within 30 days, the property is considered abandoned, and the creditor is no longer responsible for it.

What Happens After a Repossession in Louisiana?

After an auto repossession in Louisiana, the creditor will likely sell the car in an auction. The proceeds from the sale are used to offset the amount you still owe on the loan. If your car sells for less than your car loan balance, you’ll probably have to pay the difference. This is known as the deficiency balance.

For example, if the balance on your loan is $11,000, and the car sells for $8,000 at auction, you may be held responsible for the $3,000 deficiency. 

You are allowed to bid at the auction.

Do I Still Owe After a Repossession in Louisiana?

💰 You may still owe money after your car repossession in Louisiana. The amount due under the terms of the loan agreement may include attorney fees, court costs, repossession costs, and late fees as well as the actual past-due amount.

If the car is sold at auction and doesn’t make enough to cover the remaining balance, the lender will likely try to collect the deficiency balance from you.

Voluntarily surrendering your vehicle will make these fees and costs more manageable, but it doesn’t erase your loan or what you owe on it.

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

If your car has been repossessed and you want to get it back, you may contact your creditor to ask what you can do to get the car back. In some cases, they will allow you to redeem your repossessed vehicle prior to when it is sold by paying them the full balance of what you owe on the loan.

✍️ If you’re able to reach an agreement with your creditor, make sure everything you agree to is put in writing. 

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

• LouisianaLawHelp.org provides information on auto repossession as well as resources for low-income Louisianans to get legal assistance.

• Southeast Louisiana Legal Services provides legal assistance to low-income individuals regarding civil matters, including consumer protection issues.

• The Louisiana State Bar Association has a list of Legal Services Programs and Resources in the state.