California Car Repossession Lawyer
The Law Offices of Brandon A. Block helps California consumers who have experienced a wrongful vehicle repossession or who did not receive proper notice of their rights after the repossession or voluntary surrender of their cars. Since 2007, the firm has assisted thousands of consumers in eliminating hundreds of millions of dollars in deficiency balances (the remaining amount on an auto loan after the sale of a repossessed or surrendered vehicle) and has recovered millions of dollars for injured consumers.
Summary of California Repossession Law
California’s repossession laws can be summarized by the following key principles:
- After a default, your creditor (the finance company or lender you make payments to) can repossess your car without going to court, through "self-help" or "nonjudicial" repossession.
- While self-help repossession is allowed, it cannot be conducted in a way that breaches the peace.
- Your creditor must always give you a written notice of your rights after any repossession or surrender of your vehicle.
For more information on California repossession law, explore the rest of this page and the links to our Repossession Law Blog.
Self-Help Repossession
When you buy or lease a car, or you take out a title loan, your car serves as collateral (i.e., security), and you agree that the creditor can repossess your car without filing a lawsuit (i.e., use self-help repossession) if you miss a payment or otherwise default on your agreement. The creditor itself will not repossess your car. Instead, the creditor will hire a third-party repossession agency to take possession of your car.
Learn more: Licensing Requirements for Repossessors
There Must Be A Default
A creditor can repossess a vehicle without court proceedings, but there must be a valid default or breach of the security agreement. Missing a payment is the most common default, but failing to maintain insurance can also trigger one. If your vehicle is repossessed, review the security agreement and repossession circumstances with a lawyer to ensure the creditor had a valid reason. For instance, if a creditor agrees to extend the payment date but repossesses the car before, there may have been no default, making the repossession illegal.
Breach of The Peace
While self-help repossession is legal, it is a serious step, and the law imposes strict rules on those who carry out repossessions. One of the most important restrictions is that repossession cannot take place in a way that breaches the peace.
What is A Breach of The Peace?
A “breach of the peace” includes the following acts:
- Repossessing the car over the consumer's objection;
- Using or threatening to use force;
- Threatening arrest or involving law enforcement;
- Forcing the consumer to stop their car;
- Entering private property or a secured area without permission from the owner or person in legal possession of the vehicle; and
- Damaging the vehicle during the repossession.
Learn more: Repossessions from Gated & Locked Garages
My Car Has Been Repossessed - What Can I Do?
If you purchased your car in California, you have two rights after the repossession or voluntary surrender of your vehicle:
- Reinstatement. You "reinstate" by paying all past due amounts, along with any delinquency charges, and the costs of repossession. If it is not a payment default, you resolve any liens or encumbrances on the car or obtain insurance. Once reinstated, the car is returned to you, and you’ll resume the contract.
- Redemption. You "redeem" by paying off the entire remaining balance on your account, plus any delinquency charges, collection fees, and repossession costs. After redemption, the car is returned to you, and you own it outright.
While the right to redeem the vehicle cannot be denied, a creditor may limit your ability to reinstate in certain, very specific circumstances.
Learn more: Car Repossessed, Now What?
Learn more: Denial of The Right of Reinstatement
My Car Leased Car Has Been Repossessed - What Can I Do?
Different rules apply to car leases. Visit Repossession or Surrender of a Leased Car to learn about your rights.
What Notices Will I Get After a Repossession or Surrender?
After your car is repossessed or surrendered, the creditor must send you a detailed written notice outlining your rights. In a purchase, it must explain your rights to reinstate or redeem and typically is titled a “Notice of Intent" to either dispose or sell the vehicle. For a lease, it’ll cover your early termination liability and your rights to an appraisal.
What Is A Deficiency Balance?
If you're unable to afford reinstating your contract or redeeming your vehicle, the creditor will sell the car at auction. The proceeds from that sale will be applied to your account balance. However, if the sale doesn’t cover the full amount owed, the remaining balance will be considered a "deficiency," and the creditor will demand that you pay this outstanding amount.
Will I Owe A Deficiency Balance?
Regardless of whether it is a purchase or lease, the creditor must provide an accurate and complete written notice after a repossession or voluntary surrender. This notice must fully disclose all charges and other information required by California law. It's crucial to have a qualified attorney review the notice you received to ensure it complies with the law.
Suing for Unlawful Repossessions
A self-help repossession must be peaceful. If it involves a breach, you may sue the repossession company for damages, even if you were in default. You can bring claims under fair debt collection laws and for conversion, which is civil theft. The law protects consumers from unlawful repossession conduct, and if your rights are violated, you may be entitled to compensation.
Learn more: Repossessors and The Fair Debt Collection Laws