Repossession is the process of taking back a car after the owner defaults on their auto loan. Each state has different laws and regulations that dictate every step of the repossession process from start to finish. This page will provide an overview of Missouri's Repossession Laws and what you should know if you've fallen behind on car payments.
Written by Upsolve Team.
Updated June 24, 2022
When a lender finances a vehicle, that vehicle serves as the collateral that secures the loan. If the borrower falls behind on their payment schedule, the lender can seize the collateral, as long as they follow certain state guidelines. The process of taking back a car, truck, motorcycle, RV, or ATV from a borrower due to nonpayment is referred to as vehicle repossession.
If you’re at risk of having your vehicle repossessed, it’s important to understand the rights and responsibilities of borrowers, creditors, and car repossession companies under Missouri law. By familiarizing yourself with these regulations, you’ll know what to expect in the event that your vehicle is repossessed.
How Many Payments Can I Miss Without Risking a Repossession in Missouri?
Under Missouri law, a lender can’t lawfully repossess your vehicle without giving you (and any co-signers) a notice of default and right to cure. They can’t serve you with this notice until an auto loan payment is at least 10 days overdue.
Exceptions to this rule may apply if you’ve defaulted on the auto loan at least twice previously. Most overdue loans aren’t classified as in default until you’re at least 90 days past due on your account.
Will I Be Notified Before the Repossession? How?
As a borrower, once your payment is at least 10 days overdue, the lender must send you a notice of default and right to cure before they can lawfully repossess your vehicle. This notice must contain the lender’s name and contact information, the total amount due, and the date by which the borrower must catch up on their payments before they’ll face additional consequences. If the borrower doesn’t catch up on their overdue balance of the loan within 20 days of the date of this notice, the lender can repossess the affected vehicle.
How Can I Prevent a Repossession?
The only way to prevent auto repossession — without fail — is to remain current on your loan payment schedule and to honor the terms of your car loan at all times. Lenders can’t simply seize your property if they feel like doing so. You must violate the terms of your agreement before they can take your property from you.
If you’re already behind on your car payments or you suspect that you’ll have difficulty making your payments for the next few months, reach out to your lender and ask if there’s a solution. Lenders are often willing to work with borrowers to mitigate the risk of repossession. Repossessing a car is expensive and annoying, so they generally avoid it when they can. Your lender may be willing to alter the terms of your loan to make repayment more manageable, or they may be able to offer you a temporary deferment.
If your lender won’t assist you with catching up on your overdue payments, you might want to look into refinancing your loan before your vehicle is repossessed for nonpayment.
Alternatively, if you can’t afford your car loan anymore, you may want to voluntarily surrender your vehicle to your creditor. Voluntary repossession may be an especially good option if you’re upside down on your loan and you don’t think your loan payment will feel manageable anytime soon.
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What Can Repo Companies in Missouri Do?
Repo companies can’t lawfully engage in a “breach of the peace” when seizing property. Similarly, you can’t engage in a breach of the peace in an attempt to keep them from carrying out their task. So if you see a repo agent trying to take your vehicle, don’t try to stop them using force.
Repo agents are also prohibited from tricking you, misleading you, and otherwise trying to take possession of your vehicle by fraudulent means. If they violate these duties, you’ll want to contact an attorney or the authorities. If you take matters into your own hands, you risk legal trouble.
In Missouri, repossession services companies are permitted to take a vehicle from public spaces and unsecured private spaces. If you keep your vehicle in a secured garage and refuse to drive it for fear that it’ll be repossessed, a court may grant a court order to allow a repo company to take it from that secured space. If this happens, you may eventually be responsible for the legal fees the lender incurred to get the court order as well as to repossess the motor vehicle.
What About the Personal Property in My Car?
Repo agents can’t keep any personal property that has been left in a repossessed vehicle. You have the right to retrieve your personal property, so long as it isn’t attached to the car. This means you can contact the repossession company that has your vehicle so you can grab your purse and your child’s car seat, but you can’t uninstall an upgraded stereo if you’d need tools to do it. Improvements to a vehicle that now form part of the car aren’t considered retrievable personal property.
Grabbing your stuff from a repo lot can be a pain and a repo company may charge you for storing your personal belongings, so it’s a good idea to proactively remove your personal property from your car if you’re at risk of repossession.
What Happens After a Repossession in Missouri?
After a repossessor seizes a borrower’s property, they must send the borrower a Notice of Our Plan To Sell Property. This notice informs the borrower that if they don’t redeem their vehicle by paying off their account in full, their vehicle will be sold. It should also contain information about where and when the vehicle will be privately or publicly sold. Unfortunately, the amount of time Missouri gives borrowers to come up with the funds to redeem their repossessed vehicles is short. Lenders are only required to wait 10 days after a borrower receives this notice before they can sell the affected car or truck.
State law requires lenders to sell repossessed vehicles in ways that are “commercially reasonable.” This means that there is a good chance that if your car is sold, the proceeds from that sale will be close to market value and may even exceed it.
Do I Still Owe After a Repossession in Missouri?
The terms of your loan agreement aren’t nullified once your vehicle is repossessed. This means you’re still responsible for the amount you owe your lender until you either redeem the vehicle by paying off the balance you owe in full or you satisfy the balance in another way.
If your car is sold at auction, the proceeds of that sale will be applied to your balance. If the vehicle is sold for more than you owe, the profits of the sale will be returned to you. If the sale price doesn’t cover the amount you owe, you’ll be responsible for paying off the difference. This difference is called a deficiency balance.
If you don’t repay your deficiency balance, your creditor will give you a notice of sale and possible deficiency. Then they may sue you for nonpayment. If they win the lawsuit, they can get a court order to levy your bank account or garnish your wages until the balance is repaid in full. This judgment (court order) will be reflected on your credit report and will damage your credit score, so you’ll want to avoid this.
Can I Get My Car Back After a Repossession in Missouri?
Under Missouri law, creditors are required to provide borrowers with at least 10 days to redeem their vehicle. Redemption usually involves paying off the total balance owed, including fees, repossession costs, and the full financing balance for the vehicle. Ten days isn’t a lot of time to come up with the cash to pay the total balance, but some borrowers find that they can take out a new loan to pay off their old lender.
Note that some lenders are willing to set up a repayment plan for the total amount owed. If your vehicle has been repossessed and you want it back but can’t afford to pay off your balance in full, it may be worth speaking to your lender about your options. This is especially true if you’ve been navigating extreme circumstances.
Where Can I Find More Information About Repossession Laws in Missouri?
You don’t have to navigate the repossession process alone. If you’re at risk of repossession or your vehicle has already been repossessed, you can schedule a free consultation with an attorney. If you’re worried about affording legal fees, you may be eligible for low or no-cost legal advice from a locallegal aid service office.
The following resources may also be of help to you if you live in Missouri: