Repossession Laws in Nebraska

Trucks and tractors are a necessary part of farming in Nebraska, and most people need a vehicle to get around the Cornhusker state’s long rural roads. Farming is a tough business, and it can be hard to make payments on your farm tractor, truck, or car when the weather and economy aren’t on your side. One missed truck payment could result in a vehicle repossession — and that could devastate your ability to get around and to farm. 

A car or truck repossession happens when you break your car loan contract by missing a payment or violating another term of the loan. When you take out a loan for a car, truck, or tractor, the vehicle is used as collateral. If you don’t make your payments, the lender can take the vehicle back into their possession. This is called repossession. You’ll still have an option to get your vehicle back after repossession, and you might be able to prevent the repossession. This article will explain the repo process in Nebraska and what your options are to avoid or deal with one.

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

In Nebraska, the contract you signed for your car loan will dictate how many payments you can miss before you risk having your car repossessed. In some cases, your car can be repossessed with as little as one missed or late payment. Review your contract to see when your lender or creditor can start the repossession process.

Will I Be Notified Before the Repossession? How?

In Nebraska, lenders are legally required to give you a written notice before a car repossession can take place. The lender or creditor must mail you this written notice or personally deliver it to you at your last known address. 

The notice will include:

• A statement telling you that you have a right to catch up on your past-due payments,

• The contact information for the company you need to pay,

• A description of what you’re paying,

• The date the payment must be made, and 

• The amount you need to pay to make the loan current. 

You’ll have 20 days to make the payment amount listed in the notice. If you make the payment, then your loan will be reinstated. Nebraska state law requires lenders to give you this right to cure. 

After sending this notice, the lender isn’t required to give you another notice about vehicle repossession or to remind you of any other missed payments. If you don’t pay the amount due under your loan agreement by the date in the notice, the lender can repossess your car.

How Can I Prevent a Repossession?

If you make a payment of the past-due amount on your car loan you can prevent a repossession. If you received a notice informing you of the repossession and default, then you must make the payment within 20 days after the date of the notice. 

You can also prevent repossession by talking to your creditor and making a new payment arrangement before your loan payment is due. It’s important to confirm the due date change in writing to protect your legal rights in case something goes wrong. If it’s going to be hard for you to keep up with your car, truck, or tractor payments, talk to your lender about refinancing your motor vehicle loan. You also have the option to sell your car or other vehicle and use the money to pay off the loan. 

If you have considerable debt and late payments are a way of life, filing bankruptcy could help. When you file bankruptcy your lender must stop attempts to repossess your car and all other collection activity. 

If you know the repossession is inevitable, you can surrender your car voluntarily. Voluntary surrender is when you give the car or other vehicle to the lender before the repo man (or woman) comes and takes it from you. You’ll save money because you won’t have to pay the costs of repossession, and you won’t have to worry about your car disappearing when you least expect it. But you must set up a time to drop off the vehicle that is convenient for the lender. 

What Can Repo Companies in Nebraska Do?

A repo company in Nebraska can’t break into your garage or storage shed to get your car, and they can’t cut the lock on a gate to enter your property. They can tow your car out of your driveway, but they can’t enter a locked vehicle. They can tow your car from a public garage or street while you’re at work, school, or shopping.

Nebraska repo agents don’t have special licensing requirements, but there are local laws that towing companies must follow. Nebraska allows for self-help repos. This means a repo company can take your car without a court order. But they can’t use force or breach the peace while repossessing your car under Nebraska state law. This generally means that they can’t make a scene and can’t make threats or incite violence. A judge will ultimately decide what defines a breach of the peace. Although it might be tempting to start shouting and threatening the repossession agent, keep in mind disturbing the peace could land you in jail.

During a self-help repossession, the repo company can’t bring a police officer along for aid, nor can the repossession company have someone pretend to be a uniformed enforcer. (If the repossession is court-ordered, a police officer is allowed to be there.) You can call the local police station to verify a repossession. 

Active military members have special protections under the Servicemembers Civil Relief Act (SCRA) and a court order is required for repossession in most instances, but you’re required to have made at least one payment on the car loan.

What About the Personal Property in My Car?

Your personal property belongs to you and not the repossession company or the bank. They can only repossess the car. It’s best to make sure your personal possessions are removed from your car when you first miss a payment. But if you didn’t have time to remove your items and your car is repossessed, you can still call the repossession company or lender to arrange to get your things back.

What Happens After a Repossession in Nebraska?

In Nebraska, the lienholder (your lender) can sell your car at a public or private auction to the highest bidder after it is repossessed. The sale proceeds will go toward paying the amount due on your car loan debt. At this point, your debt will include the car loan balance, as well as repossession costs, auction costs, and other fees and penalties. 

If your car is sold for more than the total amount due, then the creditor is required by law to pay you the excess amount.  More commonly, the car will sell for less than what you owe, and you’ll have a deficiency balance. This is especially likely if you already owed more than the car was worth before it was repossessed. You’re responsible for paying the deficiency, and the lender can hire a collection agency to collect this amount or use tools like wage garnishment unless you file for bankruptcy.

Do I Still Owe After a Repossession in Nebraska?       

Even after your car is repossessed in Nebraska, you’ll still owe the loan amount, plus the extra costs and fees if the sale proceeds weren’t enough to cover all this. If you surrendered your car to the lender before the repo company came to get your car, your deficiency balance should be lower because you won’t have to pay the towing and repossession costs.

Under Nebraska state law, you won’t owe your deficiency balance if the vehicle wasn’t sold in a commercially reasonable matter. For instance, if your car was sold for $1.00 to the auctioneer’s son, but fair market value is $10,000, there’s a good chance you wouldn’t owe your deficiency balance.

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

You may be able to get your car back after repossession in Nebraska if you can pay the full past-due amount —plus all the added costs and expenses — before the car is sold. Generally, a creditor would rather have you pay the past-due amount and catch up on the loan rather than sell the car at an auction. Nebraska law states that a borrower has no other right to cure a default aside from the 20-day notice before repossession. But that doesn’t mean the lender won’t work with you if you want to pay your loan in full after the 20-day notice.

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

Nebraska’s legal aid offices, public libraries, and court and government websites will have more information on repossession laws in Nebraska. Here are some resources on Repossession laws in Nebraska:

• Legal Aid of Nebraska has a helpful Consumer and Debt resource page (scroll down and click on the plus sign to see Consumer Rights in Automobile Repossession). They also have a useful Collections Handbook for consumers that touches on repossession. You can also contact them for legal advice if you’re facing an auto repossession.

• The Federal Trade Commission (FTC) has vehicle repossession information for consumers. 

• The Nebraska Uniform Commercial Code (UCC) is the state law covering secured transactions. Article 9 covers the sale of collateral and the right to redeem collateral.