My Car Has Been repossessed, What Are My Rights?

It is a dark and stormy night. The wet north wind is blurring your vision. The collar of your jacket won’t keep the rain out for long so you begin to jog to your car. “My car is gone! Where is it? Has it been stolen? Did I miss a payment?”

Life can be uncertain, unexpected layoffs, emergency medical bills, and any number of other occurrences can strain your already tight budget. If you miss a car payment the lienholder can repossess your vehicle. If you have missed a payment the best course to follow is to contact the lender and explain your situation so that an agreement can be worked out. If you have a good record of payments and no other issues the lender may let you make a late payment or enter into some other arrangement.

If your car is repossessed you have rights under the law. Generally, in Texas, a default occurs if you don’t make your car payment. Once this default occurs the lender has the right to take possession of the car. The lender may repossess the car without involving the courts only if this can be done without a breach of the peace. This is typically why repossessions are done at night or while the buyer is not around.

Once the car has been repossessed, and before the lender has disposed of the car, the buyer has a right to “redeem” it. The buyer can obtain the repossessed car by paying the entire loan balance, repossession expenses, and reasonable legal fees. The lender must advise you when and where the vehicle will be auctioned off. Appropriate notice must be given to you. There are rules as to how a sale must be conducted, that is, the sale must be reasonable.

If the car is sold and does not bring enough money to pay off the debt plus the expenses of repossessing it you could be liable for the difference even though you now have no vehicle. An accounting of the transaction must be given to you showing what the car sold for and the expenses involved. If the car is sold and the price more than covers the debt and expenses the remainder must be made available to the buyer

The Law Office of Julie Johnson is dedicated to the protection of consumer rights. This blog is not intended to be specific legal advice; rather each situation must be reviewed to determine the rights and duties that may be presented by each unique set of circumstances. If you believe you have been victimized through questionable dealer practices please contact us at

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