Does the lender has the right to keep the collateral on first time default? 5 Answers as of January 15, 2014

I made a cash loan with my car for collateral. It is missing. I called the police and will contact the lender to see if they have it. Will I have to reaffirm my cash loan, plus payment due, late fees, and repossession fee to get the vehicle back? Do they get to keep it on first time default ?

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Portland Bankruptcy Law Group
Portland Bankruptcy Law Group | Christopher J. Kane
Yes, if a lender has a security interest in your vehicle they do have the right to repossess it if you miss one payment. And, if they do have a valid security interest, and you file bankruptcy, you will have to sign a reaffirmation agreement to keep the car. Per Oregon law, the lender has to hold on to the vehicle for at least 10 days before they put it up for auction. If you file bankruptcy before the vehicle is sold you can get the vehicle back. Then you can either reaffirm the vehicle in a Chapter 7 or pay off the loan in a Chapter 13 plan. Yes, you will probably be held liable for tow charges and late fees.
Answer Applies to: Oregon
Replied: 1/15/2014
It depends. State laws as well as the loan agreement control the definition of default and the point at which a lender may repossess. If the repossession was lawful, the lender may require that the entire loan, including principal, interest and all charges, be paid before the vehicle is returned. In Pennsylvania the lender must notify the borrower in writing of the total amount and the deadline for payment. If the amount is not received by the lender on time, the lender may sell the vehicle and demand payment of any deficiency. Unless the loan agreement provides otherwise, a lender may repossess after the first default. Are you a debtor in bankruptcy? If so, your lender may have violated the automatic stay.
Answer Applies to: Pennsylvania
Replied: 1/15/2014
Barr, Jones & Associates LLP
Barr, Jones & Associates LLP | Andrew Brasse
They may repossess the car as soon as you defaulted on the loan. However, most lenders will agree to let you recover the car if you work out a pay arrangement with them, and rectify the default amount. I would give them a call.
Answer Applies to: Ohio
Replied: 1/15/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Generally if you pay everything you owe them they will give the car back, as long as they have not auctioned it yet.
Answer Applies to: New York
Replied: 1/15/2014
Edelman, Combs, Latturner & Goodwin, LLC | Daniel A. Edelman
They have the right to sell it after giving you notice of the proposed sale and proposed issuance of a repo title as required by the Uniform Commercial Code and the Vehicle Code.
Answer Applies to: Illinois
Replied: 1/15/2014
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