Repossession Laws in Mississippi

Whether you’re shipping boxes in the Mississippi Delta, wrangling catfish on a farm, or sitting in a classroom at Ole Miss all day, it feels good to get in your car and drive home after a hard day’s work in the Magnolia State. Cars help us make a living and get us home to relax. But when you miss a day at work your budget can go out the window and make it difficult to pay your bills like your car loan payment. If so, you risk having your car repossessed. 

Car repossession is when a lender takes back a car because the borrower couldn’t keep up with their payments. You promise your car as collateral when you sign a car loan contract. So if you default on the loan, the lender has a right to repossess. There are ways to prevent car repossession, and you’ll have a short time to get your car back after repossession in Mississippi.

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

Unless your car loan agreement states otherwise, your car can be repossessed in Mississippi as soon as you miss your car payment or otherwise default on the loan. But based on the time and cost it takes to repossess a car, it probably won’t happen the next day. Still, if you miss a payment, you should be on alert for repossession activity.

Will I Be Notified Before the Repossession? How?

In the state of Mississippi, lenders aren’t required to give borrowers any notice before they repossess a car. A lender may send you notice of a default, but it’s not required to do so. That means you could wake up one morning and find your car gone or walk out of work and not have a way home. Take precautions if you’re behind on your car payment in Mississippi so you don’t lose your car unexpectedly. 

How Can I Prevent a Repossession?

To avoid repossession, you might be able to make arrangements with the lender for an alternate payment arrangement. Be sure to get the new payment arrangement in writing. Paying the past-due amount will prevent a repossession, but that’s not always possible. You can also talk to the lender about refinancing your loan or arrange for a short-term auto loan.

If you’ve defaulted on your loan and know your car is eventually going to be repossessed, you can consider voluntarily surrendering the car. During a voluntary surrender, you give the car to the lender before they can repossess the car. To do this, you need to make arrangements with the lender. A voluntary surrender gives you the chance to make other transportation arrangements, and it will save you potentially hundreds of dollars in repossession fees.

It’s possible to temporarily stop repossession by filing bankruptcy. When you file bankruptcy, an automatic stay goes into place that stops debt collection activity, including repossessions. If you have overwhelming debt, bankruptcy might be an option. If you’re just having trouble with your car loan, you also have the option to sell your car and use the money to pay off the loan. You can schedule a free consultation with a bankruptcy attorney to see if this is a good option for you.

What Can Repo Companies in Mississippi Do?

Mississippi allows a lender to repossess a car without a court order. This is referred to as a self-help repossession. A repo agent can tow your car from your driveway, a public street, a public parking lot, and a public garage. Repo companies must report their repossessions to the police, so check with the local police department if your car goes missing and you’ve missed a car payment.

Even though repo companies can do self-help repossessions, you have rights during this process. Repo agents can’t commit a breach of the peace by:

• Entering a locked garage, breaking a lock on a gate, or otherwise forcibly entering your property to get your car. Repossession agents must have your permission to enter your house. 

• Having a police officer assist with the repossession. If a repo agent has a police officer nearby to make the repo seem more threatening, the courts would likely consider this an invalid repo (unless it was court-ordered). If this happens, talk to a consumer protection attorney to see if you can get your car back and find out what other rights you might have based on your unique situation.

• Threatening you, breaking things, or being violent.

It’s wise not to engage in any acts that disturb the peace yourself either because you could end up with criminal charges.

Military service members on active duty have special protections as long as they’ve made at least one payment. The Servicemembers Civil Relief Act (SCRA) requires a court order for a repossession involving a car loan default by an active military service member.

What About the Personal Property in My Car?

The lender and the repossession company can’t keep your personal property after they’ve repossessed your car. The lender has a security interest in your car, not your personal items. Call your lender, the local police, or the repossession company to find out where your car is located and how to get your belongings. You can likely make arrangements with the lender to pick up your belongings.

Try to remove your personal belongings as soon as you know you’re going to be late with a car payment. This way you won’t be hassled with making multiple phone calls and figuring out arrangements to pick up your belongings. You don’t want to be suddenly left without your toddler’s favorite toy, electronics, work clothes, or school books!

What Happens After a Repossession in Mississippi?

After your car is repossessed in Mississippi, it will be sold. The money from the sale will go toward paying down the amount you owe on your car loan. Your car will either be sold in a private sale or at a public auction to the highest bidder. The money from the sale will be used to pay down the balance of the total amount you owe your lender.

You’re required by state law to get written notice of the sale. The sale is also required to be commercially reasonable. That means the motor vehicle must be sold for fair market value, and the sale should be conducted in a way that’s typical of other similar businesses. They can’t sell your car for $1.50 in the middle of the night to a private buyer on a deserted island for a not-yet-invented digital currency. You can bid on your car if it’s repossessed and sold at an auction.

If your car is sold for less than the amount you owe, you’ll have a deficiency balance. The lender/creditor can keep collecting the deficiency balance using collection agencies or methods like wage garnishment unless you file for bankruptcy. Debt collectors must stop contacting you after you file for Chapter 7 or Chapter 13 bankruptcy. 

Do I Still Owe After a Repossession in Mississippi?

Many people still owe their creditors money after their car is repossessed in Mississippi. Unless your car sells for more than the amount due on the balance of the loan (plus fees, penalties, and repo expenses) you’ll still owe your lender money. If your car sold for more than you owe on the loan plus the repo costs then the bank must pay you the surplus.

For instance, if you owed $10,000 on the car loan, your car sold for $5,000, and you had $2,000 in repossession fees, your deficiency balance would be $3,000. That’s the $10,000 loan balance plus the $2,000 in extra costs and fees minus the $5,000 the car netted at auction.

If you surrender your car to the lender before your car is repossessed, you could save hundreds of dollars because you won’t have to pay for the costs of the car repossession and the related storage. Your deficiency balance may be easier to handle, and if you can pay off your deficiency balance you may be able to salvage your credit score. 

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

Mississippi law gives borrowers a right of redemption up until the time the car is sold or the lender otherwise disposes of it. This means that you can pay the full amount you owe plus attorney fees to get your car back. The full amount you owe will include the remaining balance of your loan (not just the past-due amount), plus the repossession costs such as towing and storage. It could also include the cost of insurance, fees, and penalties.

You can call your lender to get an itemized statement of how much you owe. Then you can make arrangements to pay the total amount you owe, obtain a release for your car, and get your car back from the repossession company. Talk to your lender and the repossession company first to get the requirements straight so you don’t end up making two trips.

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

• Mississippi Legal Services Repossession – Article on Repossession by North Mississippi Rural Legal Services with phone numbers for legal services. 

• Federal Trade Commission (FTC) – Information on vehicle repossession from the Federal Trade Commission. 

• Mississippi Free Legal Answers – A virtual legal advice clinic sponsored by the American Bar Association.

• Mississippi State Law – You’ll find repossession laws under Title 75, Chapter 9 (secured transactions), Mississippi’s Uniform Commercial Code. The right to redeem collateral is under Section 75-9-623.