Can my car be repossessed if I need it for work?

On Behalf of | Feb 15, 2022 | Bankruptcy |

Financial challenges can cause difficulties in many aspects of life. Not making loan payments on time, whether for a Missouri home mortgage or a vehicle, might result in a default, meaning the lender “calls in the loan.” If it is a mortgage default, a lender can begin foreclosure proceedings. If it is a vehicle, the asset can be repossessed.

While there are specific laws regarding repossession of a vehicle, the language in which they are written is somewhat ambiguous. For instance, a person might be concerned about losing a vehicle to repossession when he or she needs it to travel to and from work. If the lender sends a tow truck out to take the vehicle away while the person is working, he or she would undoubtedly be upset.

What does Missouri law say about this?

State law merely says that repossession may not “breach the peace” or “create a public disturbance.” What constitutes a breach of peace or public disturbance? Repossession laws do not specify how these phrases are to be interpreted. The law does say, however, that a lender has two options when carrying out a repossession.

A lender can file a legal claim against a person who has defaulted on a vehicle loan, which means the court may order the repossession. However, a lender does not have to go to court to repossess a vehicle; creditors may make a person aware that he or she is in default and that his or her vehicle is being repossessed. A tow truck can then be dispatched to pick up the vehicle. If the lender sells the vehicle for less than its previous owner owed on the loan, the borrower may be responsible for paying the difference. Filing for Chapter 7 bankruptcyactivates an automatic stay against auto repossession, foreclosure and even phone calls from collection agencies.

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