Obtaining a reliable car is only half the battle for low-income families. Keeping the car can prove just as difficult. Considering that a car is for most families a basic necessity, there are surprisingly few protections for a car owner when a lender decides to take a family’s car. Every state now permits a lender, when it believes the car owner to be in default, to take a car away from the owner without any formal judicial process or the use of law enforcement, through a procedure known as “self-help” repossession. The creditor then sells the vehicle, again without court supervision.
This ability of the lender to take away the consumer’s car and sell it at an unsupervised sale leaves the consumer in a very vulnerable situation. If the lender is in error and the consumer is not really in default, the consumer is still without a car and without transportation to work while the dispute plays out. Because the lender need not file a court action, if the consumer disputes the lender’s repossession, this will be after the car is gone, and conceivably after it is sold.
In addition, the consumer bears the burden of trying to take the matter to court. This is highly impractical and almost never happens. Even if the family is able to file a case in court and prove that the car should not have been repossessed, it is often too late to save a job lost for lack of transportation.
Lenders, knowing they have this cudgel to wield against the consumer, often threaten repossession without process as a way of forcing the consumer to comply with their demands, whether justified or not.
The obvious problems with the use of self-help led to widespread statutory reform in the area of landlord tenant law. Judicial procedures have been created that allow an expedited judicial process to remove a tenant in possession. Today the vast majority of states prohibit landlords from using self-help to evict residential tenants.
Unfortunately, the law concerning the repossession of automobiles has not developed to the same degree. In today’s society, a car can be just as important to a family’s survival as an apartment, and repossession without the benefit of judicial process and law enforcement officials is just as likely to lead to violence as self-help eviction. Every year, many car owners and those hired by secured creditors to repossess cars are injured or killed during attempted self-help repossessions.
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