Repossession of a Motor Vehicle, What you need to know. Print E-mail
Written by Kerry S. Doolittle   
Friday, 09 April 2010

 Upon default by the debtor, a creditor holding a perfected security interest in a motor vehicle has the right to take possession of the vehicle without judicial process (i.e. a "self-help" repo) if this can be done without a breach of the peace.  The word "perfected" is very important.  If your security interest is not perfected, you have no security interest.  In the case of motor vehicles that means making sure your lien is recorded on the vehicles title and that title is filed with the State to update their records to reflect your lien.  If your attempt at repossession causes a breach of the peace, abandon the attempt or you may face criminal liability.  

Disposition of Motor Vehicle After Repossession

  After repossession a motor vehicle, the creditor may sell the vehicle at a public or private sale, lease the vehicle, or otherwise dispose of it in any manner, at any time, at any place and on any terms so long as every aspect of the disposition is commercially reasonable. The creditor should send reasonable notification to the debtor of the time and place of any public sale or of the time after which any private sale or other intended disposition may occur. The creditor may buy the vehicle at a public sale and may buy the vehicle at a private sale if it is of a type customarily sold in a recognized market or a type which is the subject of a widely distributed standard price quotations.

Compulsory Disposition of Motor Vehicle After Repossession

If the debtor has paid 60% of the cash price or 60% of the loan, and the debtor has not signed after default a statement renouncing or modifying his rights under O.C.G.A. 11-9-505, you must dispose of the vehicle. In any other case you may, after default, propose to retain the vehicle in satisfaction of the debt. Written notice of such proposal must be sent to the debtor. If the debtor objects in writing within 21 days after the notice was sent, you must dispose of the vehicle. In the absence of written objection, you may retain the vehicle in satisfaction of the debt. I that event, you cannot pursue a deficiency claim.

Debtor's Right to Redeem

 The debtor may redeem the motor vehicle by tendering full payment of all the secured debt, repossession expenses, and reasonable attorney's fees and litigation expenses if provided in the agreement. Redemption may occur at any time before you have disposed of the motor vehicle, entered into a contract for its disposition, or retained the vehicle in satisfaction of the debt.

Recovery of a Deficiency

In order to pursue a claim for the deficiency between the amount owed to you by the debtor and the amount obtained from sale of the vehicle, you must within ten days after the repossession send a notice to the debtor by certified mail, return receipt requested, of your intent to pursue a deficiency claim. The notice must also advise the debtor of his right to redeem the vehicle, as well as his right to demand a public sale of the vehicle. The debtor has ten days from your mailing this notice to demand a public sale in writing by certified mail.

These are just some of the details required to accomplish a repossession.  If you are not familiar with the process, you should hire an attorney to assist with the steps, particularly the notice letters required.


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