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 Vermont'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 you take out a loan to purchase a car or truck, the lender will likely warn you not to fall behind on your payments. But occasionally, things happen in life that can cause you to miss a loan payment or two. If so, the lender or creditor has a right to repossess your vehicle. Repossession involves taking back the vehicle serving as collateral for a secured auto loan that is now in default.
When creditors seize a car, truck, or ATV, they must abide by the rights and responsibilities outlined by Vermont law. If you live in Vermont and your car has either already been taken by your lender or is at risk of being repossessed, read on to learn about your options.
How Many Payments Can I Miss Without Risking a Repossession in Vermont?
The terms of your loan contract will dictate when you’ll be at risk of repossession due to missed payments. Many car loan agreements allow lenders (also called the secured party or lienholder) to repossess a motor vehicle if you’re even a single day past due on one payment is past due. Most lenders won’t initiate the repossession process for such a minor infraction because it’s time-consuming and expensive for them. But you are at risk of repossession immediately after missing a car payment. Most of the time, lenders won’t classify an auto loan as in default until a borrower is delinquent in their payments for 90 days or more.
Will I Be Notified Before the Repossession? How?
The state of Vermont requires lenders to notify borrowers who are delinquent in their accounts that they are at risk of vehicle repossession. This written notice should contain information about how long the borrower has to catch up on their payments before their property will be seized. That time frame may be mandated by the state law or your lender may choose its own time frame. Either way, you likely won’t be given much notice about Vermont repossession. If you receive notice that you’re at risk of having your vehicle repossessed by a certain date, act quickly to resolve your outstanding loan balance.
How Can I Prevent a Repossession?
You can prevent a car repossession by ensuring that you make your auto loan payments by their due date each month. But if you’re already behind in your payments, there may be ways for you to catch up and prevent repossession if your vehicle is at risk of being seized by a repo man.
First, you can consider refinancing your loan. This process would allow you to enter into a new loan so that you can pay off the balance of your existing loan.
Second, you could contact your lender or creditor and ask if they’re willing to modify your loan terms or forgive your tardiness on a one-time basis. You can also ask them to grant you a deferment, which allows you to skip a payment and tack it onto the end of your loan term.
Finally, if you can’t afford to make your loan payments anymore, you can speak with your lender about voluntary repossession. This process would allow you to return your vehicle to your lender in exchange for forgiveness of all or part of your debt. You may especially benefit from voluntary repossession if you are strapped for cash and your loan is already upside down. Additionally, this can help prevent credit report and credit score damage that will occur if your vehicle is repossessed involuntarily.
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What Can Repo Companies in Vermont Do?
Unlike lenders, repossession companies aren’t required to notify borrowers before taking physical possession of their property. So, if you’re behind on your auto loan payments, you may walk out into a parking lot or to your driveway one day to discover that your vehicle is gone without warning. Repo agents can’t seize a vehicle that is locked up or secured in an enclosed space, but they can take it from virtually anywhere else.
If you come across a repossession agent who is seizing your vehicle, don’t try to stop them by using force. This kind of approach is referred to as a breach of the peace and can get you in serious legal trouble. Just as you aren’t permitted to breach the peace, neither are repo men. They also aren’t permitted to trick, mislead, or behave fraudulently in their quest to recover a repossessed vehicle. If you are affected by this kind of unlawful behavior, contact a consumer protection attorney to explore your legal options.
What About the Personal Property in My Car?
When it comes to personal property left in a repossessed vehicle, there is good news and bad news. The good news is that you’re legally entitled to retrieve your personal property from your repossessed car. The bad news is that the company that seized your vehicle may charge you a fee to retrieve it. So, if you’re currently behind on your auto loan payments but your car hasn’t been repossessed yet, you may want to remove your belongings from your vehicle, just in case.
If you’ve made improvements to your car, such as an upgraded stereo system, that can’t be removed without tools, uninstall those improvements if you wish to maintain ownership over them. The law doesn’t require repo companies to return property that is attached to a car. Instead, it’s considered part of the car.
What Happens After a Repossession in Vermont?
A lender who has repossessed a vehicle in Vermont will sell that vehicle at auction to the highest bidder unless the original owner redeems their vehicle within the timeframe specified in their auto loan. Once your car is repossessed, your lender should serve you with notice of how long you’ll be permitted to redeem your vehicle and of the time and place of the auction if you don’t redeem it.
Do I Still Owe After a Repossession in Vermont?
Once your vehicle has been sold, the proceeds of that sale will be applied to your account balance. If the proceeds of the repo sale don’t cover the full amount that you owe your lender, you’ll need to resolve this deficiency balance. If you don’t pay your lender the deficiency amount, they could sue you for repayment. If a court grants the lender or creditor a deficiency judgment, they garnish your wages or place a bank levy on your account until your balance has been paid in full.
Can I Get My Car Back After a Repossession in Vermont?
If you want your repossessed car back, your lender may require you to fully redeem your vehicle first. To redeem your car, you must pay the total amount you owe on your account. This total balance likely includes the full outstanding loan amount plus repossession costs and fees.
If you can’t afford to redeem your vehicle and can’t secure a new loan to pay off what you owe, your lender may be willing to negotiate alternative repayment arrangements. While this route to getting your car back isn’t guaranteed, it is worth a try.
Where Can I Find More Information About Repossession Laws in Vermont?
If you don’t want to navigate auto repossession issues on your own, know that help is available. You can speak with an attorney. If you can’t afford attorney fees, contact a local legal aid service to receive legal advice at little or no cost. The following resources may be of help to you if you live in Vermont: