When you buy a vehicle with a loan, the lender will typically place a lien on the title of the vehicle until the loan balance is paid off. The lender will also typically have the right to repossess the vehicle (the collateral) if you default on, or breach the terms of, your loan. The contract will tell you what events cause a “default” but the most frequent reason for default is the vehicle owner’s failure to make timely monthly payments. However, even if the owner of the vehicle defaults, the lender is required to follower certain rules and if they do not follow these rules, the repossession may be unlawful.

These rules the lender must follow are laid out below:

In the event the lender has a history of accepting late payments from you, the terms of the contract may be determined to have been modified. The lender cannot repossess the vehicle until the loan is again in default, for a different reason other than solely you were making consistently late payments which they consistently accepted. Further, the lender must give you proper notice, usually in writing (through a letter), that it will not accept your future late payments. In the state of Minnesota, these notices are called Cobb letters. In the event your lender has accepted your consistent late payments, and then this lender repossesses your vehicle without previously sending you a Cobb letter, the lender’s actions likely amount to an unlawful repossession of your vehicle.
The agent for the lender that performs the repossession cannot “breach the peace” during the process of repossessing your vehicle. In Minnesota, as well as many other states, the agent has the right to seize your vehicle without any notice and at any time, late or early, in the day or night. The repossession agent is not required to have a court order, as long as they do not breach the peace. When would the repo agent’s actions be considered to breach the peace? A breach of the peace may occur when the repo man resorts to threats or actual force to seize your vehicle. Going into a locked garage to get the vehicle is one example that is usually determined to be a breach of the peace. After the repo agent breaches the peace, he/she loses the right to seize your vehicle without a court order. If the repo agent seizes your vehicle after a breach of the peace, but without a court order, it has been unlawfully repossessed.
Another example of an unlawful repossession is when you paid the full amount of your loan on the vehicle, and the lender failed to release the lien on your vehicle’s title. If this results in a repossession of your vehicle, this repossession is unlawful.

If your vehicle was unlawfully repossessed, you may have claims against the lender AND the repo man for statutory and actual damages. You may be entitled to thousands of dollars more than you are currently being offered by the lender or repossession company, if you are even being offered anything at all. For a better understanding of the damages you may be entitled to and a Free Case Evaluation, please contact our attorneys now at 952-295-3935 or fill out the Free Case Evaluation Form.

For further reading, refer to the following list of wrongful repo practice areas that our attorneys specialize in: