Florida Repossession Law

A car (or truck) is a vehicle for freedom—freedom to go to work, school, medical appointments, and even a trip to the park. People who live in rural Florida or work odd hours in the healthcare, retail, or restaurant industries depend on their vehicles to survive. A vehicle repossession can disrupt your ability to manage necessary activities. One missed car (or truck) loan payment can lead to repossession. A vehicle repossession can disrupt your life and wreck your credit score. In this article, we’ll help you learn about your options under Florida repossession laws so you can keep your car far away from the repo man (or woman) and successfully manage your car loan debt over time.

Florida Repossession Process

Florida state laws govern the Florida car repossession process. Florida Title 33, Section 537.012, specifically governs car repossessions. There are also consumer laws and laws governing contracts that come into play. Generally, car loan contracts permit a car repossession after one missed loan payment. 

A car loan is a secured loan. In simple terms, that means that the lender can take your car if you don’t make your car loan payments in full and on time. When a borrower signs a motor vehicle loan contract, they make a promise to make timely payments. The borrower also agrees that the motor vehicle can be repossessed if they fail to make timely payments. Car repossession is like a house foreclosure. If you don’t make your mortgage payments, the bank can take your house. If you don’t make your car payments, the lender can take your car.

The Florida Department of Agricultural and Consumer Services regulates “recovery agents” - the persons who can repossess your car. Recovery agents must be licensed. Laws for recovery agents are listed in Florida Statutes and Florida Administrative Law. These laws also tell the repo men (and repo women) where and when they can and cannot take your car. If your car is parked in an ungated public area, like on the street or in a public parking lot, they can repossess your car. They cannot repossess your car from locked driveways and gated areas. There must be no breach of the peace, they cannot use physical force, and they cannot carry firearms. 

You have the legal right to retrieve your private property from a repossessed vehicle. The recovery agent must keep an accurate record of personal items found in a repossessed car. Just make sure to get your belongings before your car is sold! The recovery agent has to hold on to the records for two years, but they can dispose of your personal property in 45 days. 

After your car is repossessed, your lender must give you written notice that the car is repossessed. The car can then be sold at a public auction or private sale. The lender must give you notice of the auction or private sale date. Most repossessed vehicles are sold at public auctions. Repossessed vehicles must be sold in a “commercially reasonable manner,” which means the vehicle sale price must be in the ballpark of a fair market value. For example, if you had a new $50,000 vehicle for one year, the lender can’t sell the vehicle for $1.00 and leave you owing $49,999.00 plus costs and expenses. But the lender doesn’t have to sell the vehicle for the highest price possible either. 

If your car is sold for an amount less than the amount you owe, then you can be sued for the difference. Your interest fees, late fees, and repo fees will be included in the total amount you owe. The amount that’s not covered by the resale of the car is called the deficiency balance. The lender can sue you for the deficiency balance, and even get a court-ordered deficiency judgment against you. That balance will take into consideration the fair market value of your vehicle. 

Responding to Repossession in Florida

Even after your car has been repossessed in Florida, you still have options available to you. You can redeem your car, reaffirm your car loan, or surrender your car. 

Car redemption: This is an option if you have money at your disposal. You can call the car lender and offer to pay a lump sum to get the car back. Some companies will accept the loan balance, others may even accept a negotiated lower lump sum. You’ll probably need to pay more than the balance of your loan if you choose to redeem your car because the cost of the repossession will be included in the total debt owed. But this still might be an option if you’re getting some back pay from unemployment, disability, or a court case, or have money you can borrow. 

Loan reaffirmation: Many lenders will allow you to reaffirm a car loan during bankruptcy. This essentially means that you promise to honor the terms of your loan agreement and make up missed payments. Be careful if you choose reaffirmation—if you default again, your car could be repossessed again.

Surrender: Sometimes, it’s best to surrender. In Florida, you’re allowed a “voluntary repossession” process to surrender your car. This means that you’ll voluntarily give the lender the car. You make the first move. Why? Because it will save you money. You won’t pay for the expenses of an involuntary repossession and you can avoid a deficiency balance. You can also surrender your car during bankruptcy. 

Filing Bankruptcy to Avoid Car Repossession

If you feel as if your personal financial situation is spiraling and you could benefit from a fresh start, filing bankruptcy can help you avoid car repossession. When you file bankruptcy, an automatic stay goes into place that puts a temporary stop on all repossession activities until the bankruptcy process wraps up. This will give you time to catch your breath and sort through your finances so you can manage your debt. 

If you file for bankruptcy, you must decide if you want to keep your car. You’ll have the option to redeem the car or reaffirm the loan, but the final decision must be approved by the bankruptcy court. If you file a Chapter 13 bankruptcy, you’ll be able to make a monthly payment plan that stretches out the payments for a three- or five-year period and will be based on the value of the car. If you owe more than the value of the car, this approach will save you money. If your car was sold at a public auction, bankruptcy can protect you from a lender going after you for a deficiency balance.

Your income will help determine whether you can file a Chapter 7 or Chapter 13 bankruptcy. You must fall into certain income standards and pass a Means Test to file a Chapter 7 bankruptcy. Upsolve has a free bankruptcy tool to help you file a Chapter 7 bankruptcy if your case is simple enough that you don’t need an attorney’s help.

Let’s Summarize...

If you’re in Florida and your car has been repossessed, you still have the opportunity to redeem your car or reaffirm your loan. You can also file bankruptcy to help you keep your car, or to help you get rid of future collection activity on a deficiency balance. You can always talk to a local Florida attorney to find out how you can keep your car and to learn whether bankruptcy is the right option for you.