Sometimes things happen that are outside of our control and we get behind on loan payments. If you’ve made a late car payment or if you’ve missed one entirely, you might be concerned about the bank sending someone to repossess your property and wondering if you should be keeping an eye out for the repo man. You can set your mind at ease by learning about the repossession process, what rights you have, and how to prevent the situation entirely. This article will address repossessions and repo agents, the laws they must follow, and how they can track you down if you try to hide your car.
Written by Attorney Eric Hansen.
Updated October 8, 2021
Sometimes things happen that are outside of our control and we get behind on loan payments. If you’ve made a late car payment or if you’ve missed one entirely, you might be concerned about the bank sending someone to repossess your property and wondering if you should be keeping an eye out for the repo man.
You can set your mind at ease by learning about the repossession process, what rights you have, and how to prevent the situation entirely. This article will address repossessions and repo agents, the laws they must follow, and how they can track you down if you try to hide your car.
A repossession company is a business that offers repossession services like collateral recovery to lenders and collection agencies. They use repossession agents to conduct their business, much of which involves auto recovery. Lenders may hire such a company to repossess a vehicle after a borrower has defaulted or is behind on their monthly auto loan payments. Auto loans are called secured loans because they are backed by the car, a secured asset. Secured loan lenders can take back the secured asset if the borrower defaults on the loan. They can then sell the car to try to cover their losses.
Depending on the state you live in, your lender may be required to first send a notice of default and give you the right to make up the payments (the right to cure) before repossessing your property. Each state has different laws, so the repossession process can be confusing. If you need more information to adequately protect your rights, please consult with an experienced attorney to get legal advice on your unique situation.
What Is a Repo Man?
Repo company employees are called repossession agents but are often referred to as repo men. A repo man doesn’t need a formal education but they must have a working knowledge of state repossession laws and a valid commercial vehicle license because tow trucks are used for auto recovery. Some repo companies have their own tow trucks. Other repo companies work with local towing companies and their truck drivers to perform auto repossessions.
How Repo Agents Locate Cars To Be Seized
In order to repossess a car, the repo agent has to find it first. The lender, lienholder, or collection agency will give the borrower’s home and work address to the repo man who then attempts to repossess the car at those locations. A repo company may also use GPS tracking to find the car. Modern vehicles commonly have GPS transponders that make it easier for a repo company to locate the vehicle when it isn’t parked at the borrower’s work or home address.
Even though lenders have a right to collateral recovery, repossession itself is a legal process. Lenders and borrowers both have legal protections and rights. Repossessors sometimes encounter borrowers who try to make their job difficult by hiding their car in a locked garage, at a friend’s place, or at a family member’s home. If repo agents can’t repossess the car without breaching the peace or entering a locked garage, they can seek a replevin order from the court.
This court order requires the borrower to give the car back to the financial institution that made the loan. You can face civil and/or criminal penalties if you refuse to follow a replevin order.
Repossession Laws That Agents Must Follow
Repossession agents must follow certain laws when seizing secured assets on behalf of the creditor. Repo men can’t breach the peace while repossessing collateral. This means they can’t:
Enter a locked building like a garage without your permission;
Use physical force or cut a lock with assistance from a locksmith or construction equipment; or
Do hard or physical violence or make aggressive threats.
While a repo company can’t breach the peace, they can have their agents enter through an unlocked or open garage to take possession of your car. They can also use skip tracing to find borrowers who have tried to skip town or hide an asset to keep it from being repossessed. This means the company can review a borrower’s public records, credit reports, and address records for information to help locate them. An auto repossession company may also use a Digital Recognition Network (DRN) or a license plate recognition service to help track down a car.
You should hopefully feel a little more at ease now that you know about what a repossession company is, how they operate, and some of the consumer protections available to you. Repossession companies can be a bit intimidating and stress-inducing. But they don’t have to be.
You now know that a recovery agent cannot breach the peace while attempting to repossess your car and they can’t cut a lock or break into your garage. You also now know what tactics a repossession company will use to track down and recover the collateral for your lender. If you’re worried about a repossession you can consult with a private attorney to discuss your legal rights further.