California Repossession Law: What to do

This is for automobiles and trucks that are purchased, not leased. Leases and sales of vehicles are treated very differently. As a general rule, you have far more rights with a sale than with a lease. This is not intended to be a substitute for getting prompt legal advice. If your car has been repossessed or you are being sued, you should contact an attorney to discuss the California repossession laws immediately. Delay is dangerous.

BEFORE REPOSSESSION

• Keep all your documents.

• Keep your purchase documents in a file. Start before you have a problem. Do not use the glove compartment to store your papers. When the car is gone, you will lose them.

• Any letters, notes of conversations with the auto finance company. If your lender is calling and saying you owe them money that you don't, keep a written log of the telephone calls. Be aware that the person on the other end is typing notes into a computer as you speak. Sometimes those notes are not accurate. Write down who you talked to, when, and what was said. Even if the person on the other end of the telephone is rude or abrasive, you should always be polite and responsive.

• If there was a mistake in their record keeping, write them a letter and tell them so. Ask them to investigate and correct the problem.

• If you know or suspect repossession is imminent, take all your personal belongings out of the car. Once the car is repossessed, you will lose them or may be required to pay to get your own things back. Do not conceal the vehicle or interfere with a repossession.

AFTER REPOSSESSION

• Again, if your car has been repossessed, you should contact an attorney immediately.

• The NOTICE OF INTENT TO DISPOSE OF VEHICLE.

• After repossessing your car in California, the auto finance company will send you a letter called, a NOTICE OF INTENT. It may be titled differently, but it tells you that they are going to sell your car, and what you can do to get it back.

• The letter must state "either that there is a conditional right to reinstate the contract until the expiration of 15 days from the date of giving or mailing the notice and all the conditions precedent thereto or that there is no right of reinstatement and provides a statement of reasons therefore.

• The NOTICE OF INTENT must tell you precisely what to do in order to reinstate your contract, including stating the amounts due, to whom they are due, the addresses and/or contact information for those parties, and any other specific actions the buyer must take.

• This is perhaps the most important piece of paper in the whole process. Read it carefully. DO NOT THROW IT AWAY OR LOSE IT. The auto finance company has to comply with the repossession law. If they do not, they may have committed "conversion" by selling your car, and they may be liable.

You can fax the NOTICE OF INTENT to this office at
1 (858) 270-7710 or you can scan and email it to
mlindsey@lemonlawcenter.com

If you do not redeem or reinstate the contract, you may be sued by the finance company. Typically the auto finance company will sell the vehicle for a lot less than you owe on it, and sue you for the difference. This is called a "deficiency". If you are served with legal documents you should contact an attorney immediately.

Remember, most consumers have rights and good defenses to these collection suits. If the NOTICE OF INTENT does not comply with the law, then the finance company is not entitled to the deficiency. That is just one of the reasons to make sure you keep all your documents. Good records are essential to help you establish your rights and preserve your defenses.

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The Law Office of Michael E. Lindsey
Tel: (858) 270-7000 Fax: (858) 270-7710