When someone finances a vehicle purchase, the vehicle they acquire serves as the collateral for the loan. Lenders can feel comfortable providing auto loans even when people have mediocre credit scores because they can repossess the vehicle if someone defaults on the loan.
Vehicle repossession deprives someone of a vehicle after they have made payments on it for months or possibly years. It can leave someone without transportation to get to work or to care for their family. Someone who has experienced a vehicle repossession might struggle to secure financing for another purchase in the future.
Can someone with a repossessed vehicle reclaim the vehicle after losing possession of it?
Tennessee does protect vehicle buyers
There are numerous laws in Tennessee limiting vehicle repossession. For example, lenders typically cannot disrupt the peace with repossession efforts. If someone opposes the process, a court order may be necessary to repossess the vehicle without violating the law. However, many lenders are able to obtain court orders and can move forward with repossession even if the buyer opposes the decision.
After the repossession occurs, the vehicle’s owner still has options available. The lender likely intends to resell the vehicle to another party. The person who defaulted on the payments for the loan should receive at least 10 days advance notice before the intended sale of the vehicle. They have up until the sale date to redeem the vehicle.
That process typically involves paying off not just the missed payments but the full balance owed on the financed vehicle. For someone near the end of the loan, it might be possible to put together enough capital to pay off the vehicle loan before the sale of the vehicle. Other times, someone struggling to make vehicle payments may not be in a position to put together that much money with little notice.
Lenders in Tennessee do not necessarily need to advise someone ahead of time about their intent to repossess a vehicle. Therefore, anyone who has missed one or more payments could be at risk of losing the collateral property that secured the loan now in default.
Filing for personal bankruptcy is one of the more successful strategies people utilize to prevent vehicle repossession. In some cases, it may also be possible to take legal action to reclaim a vehicle after repossession by proving that the lender made a mistake or violated the law. It may also be possible to redeem the vehicle in question. Those who understand the limitations on vehicle repossessions are in a better position to respond after one occurs.
