Can I Repossess a Car in My Name

A truck being towed on the highway. Photo credit: Paul O'Rear, Flickr.

Question: I bought a truck for my husband in 2007. About 6 months later we separated and then divorced. Our divorce decree stated that he could keep the truck as long as made the payments, when the vehicle was paid for I would sign the tittle over to him.  He is no longer making the payments or paying the insurance for this vehicle. The vehicle is titled, registered and insured in my name and only my name. Can I repossess it? How do I do that?

Answer: Let's be clear about the word "repossess." Repossession is a technical legal term covered by all sorts of state laws, regulation requirements for companies who handle repossessions, and federal statutes administered by agencies like the Federal Trade Commission.  According to the FTC Consumer Information division, while many states allow creditors to repossess a vehicle "as soon as you default on your loan" there are consumer protections in place that that can limit where, when, and how that repo goes down.

In Massachusetts for example, the seizure law covers "secured creditors under a consumer credit transaction." This generally means banks, credit unions, or other public consumer lenders who lent the money for the purchase of the car using the car as collateral to secure the loan.

So how do people get in this situation where someone else has promised to make your car payments in the first place? For some people it happens when there is a divorce, separation, or other break-up of a relationship. Sometimes family members have given cars to other family members, like a parent to a child. That person takes a car and agrees to make the payments. When any of those payments are missed, the bank or lender doesn't care about who did what or who promised what, it only cares about who is on the promissory note. Heed the FTC's advice: "Late or missed payments can have serious consequences; late fees, repossession, and negative entries on your credit report can make it more difficult to get credit in the future."

If you are the only person on the note, then you have every right to take the car back, but it wouldn't be considered repossession, just taking back what you own. If both people are on the note, then either person has a right to the use of the car, so, technically, you could take the car back—if you can find it and can do so without breaking any other laws like disturbing the peace.

If you're selling a car that has an outstanding loan balance, the person buying the car needs to secure her own financing. Then the buyer pays the seller, the seller pays off his outstanding loan balance and keeps any money that is left over. A cash transaction is always the simplest—cash is king, after all—but if financing is involved or if you do want or need to transfer the balance of the existing loan, contact your lender.

Generally, it is a violation of the terms of the original loan agreement simply to, on your own, transfer payment responsibility from one person to another. Just signing the back of the title doesn't get you off the hook, either.  Each state's Department of Motor Vehicles will have instructions and forms to complete to transfer the title. Take a look at New York. There the new owner needs to complete a vehicle registration form and a statement of transaction form, in addition to paying the registration and transfer fees and any uncollected sales tax.

Bottom line: No, you can't really repossess your own car, but you can protect yourself ahead of time so you don't end up in that sort of sticky situation. Don't cut corners when your credit score and your bank account are on the line.

We're scouring the Internet to uncover interesting questions that people have posted looking for advice from the unwashed masses. We will contact experts to give you well-researched, professional advice. You can also submit questions to autos_qotd@yahoo.com.

Can I Repossess a Car in My Name

Source: https://autos.yahoo.com/can-i-repossess-my-own-car-127244361907.html

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