When you default on your car loan, your creditor can legally repossess your vehicle. However, there are certain steps that a creditor has to take in order for the repossession to be legal.
You do not have to miss several payments before a creditor takes your car. The Maryland Department of Labor, Licensing and Regulation says that a creditor can repossess your car after your first missed payment. Additionally, they can take your vehicle if you do not follow all the terms of the contract.
What is the repossession process?
Your creditor has to send you a discretionary notice before taking action. This notice should explain the situation so that you understand exactly why the lender wants to repossess your vehicle. You should receive this notice in the mail at least 10 days before the repossession occurs.
After taking your vehicle, the creditor has to send you another notice. This notice should inform you about the official repossession of your car. You should receive this notice within five days after the lender takes your car.
How long does a creditor have to keep your car?
After repossessing your car, the creditor cannot immediately sell it to another person. Legally, you should have an opportunity to get your car back. A creditor has to hold your vehicle for 15 days. This provides you with the time you need to speak to your lender and work out a way to renew the contract.
While creditors can repossess your car, there are limitations on the ways in which they can do so. People cannot use force or threaten to harm you. If someone uses force or fails to follow the repossession process, you may have grounds to file a complaint.