A Guide to Wrongful Repossession in Georgia
Dealing with a wrongful repossession can be stressful and embarrassing. An attorney at Bournakis & Mitchell, P.C. could help you regain your dignity. Call now!
What Is Wrongful Repossession?
Many people financially over-extend themselves when taking out auto loans. They buy a car they cannot maintain the payments on, and their creditor might contact a repossession company to remedy the situation and recover the vehicle once they default.
As much as a creditor, in this instance, may be entitled to recover the property due to unpaid debt, repossession must be carried out within legal boundaries. If creditors or their repossession agents take action before they are legally able to or act in breach of repossession laws, they may be liable for wrongful repossession.
Wrongful repossession occurs when a creditor takes possession of any property to which they are not entitled. For instance, if a creditor or repo agent mistakenly repossesses a vehicle without being aware that the debtor had completed the loan payments, they could be liable for wrongful repossession and could face legal action in court.
Wrongful repossession laws vary from state to state, so if you’re dealing with such a case, it is important to have an idea of the applicable laws in your state to determine whether you have a cause of action. This discussion centers around repossession laws under the Georgia Code. So if you think that your car has been wrongfully repossessed in Georgia, please continue reading to learn more about your options and how an attorney can help you.
Repossession Laws in Georgia
Repossession Laws allow secured creditors to reclaim and dispose of debt collateral if the debtor defaults on the repayment plan.
In some states, the debtor cannot repossess the item or property in question without notifying the debtor in writing and allowing them to redeem or pay off the debt. This is not the case in Georgia.
According to Title 11 of the Georgia Code, a secured creditor can take possession of any property upon which there is a security interest once the debtor is in default. They can also dismantle the equipment and render it unusable or dispose of it on the debtor’s premises.
A creditor, in such circumstances, does not need to obtain a court order or issue a notice of repossession before they can lawfully recover the collateral. The law only requires that non-judicial repossession proceeds without disturbing the peace.
This means that if you’re in default of your Georgia car payments, the car company or their repossession agent can recover the car at any time, as long as they do so without creating a stir.
However, if the creditor disposes of the collateral after repossession, and the sum realized is not enough to offset the debt, the creditor cannot recover the outstanding amount from the debtor unless they had notified the debtor of their intention to recover such amounts within ten days of the repossession.
When Is Repossession Wrongful in Georgia?
Does the broad repossession powers of creditors under the Georgia Code mean that all forms of repossession are legal? The answer is no.
Wrongful repossession can occur in Georgia if:
- The repossession caused a public disturbance.
- The parties agreed to a repossession procedure upon default in the loan agreement or conditional sale contract that the creditor or repo agent didn’t follow.
- The repossession was done in error, as the loan had already been repaid.
If you’re dealing with any of these situations, you may be able to file an action in court and recover damages. You can consult a repossession attorney to determine the appropriate course of action.
It is important to fight cases of wrongful repossession because it could negatively affect your credit score. Many financial institutions use credit scores to determine whether or not to issue an auto loan. A previous auto repossession will negatively affect that score and make it more difficult for the person to get loans in the future.
How to Stop a Repossession in Georgia
If the repossession of your vehicle or property was lawful, there are still ways to halt the repossession and get your property back. You could try the following strategies:
Negotiation: A missed payment is usually the basis for a repossession. So, if you can negotiate a new payment structure that is convenient for you, you may be able to avoid repossession. If your negotiation succeeds, try to get the updated debt terms in writing as evidence of the new agreement.
Bankruptcy: Bankruptcy is another way that could help you stop repossession immediately. If you are unable to pay your debts, either personally or with the assistance of bankruptcy lawyers, you may file for bankruptcy under Chapter 7 or Chapter 13. Once you file for bankruptcy, there is an automatic stay against all debt recovery actions by creditors until the bankruptcy process is complete. This means that the creditor’s right to repossession is suspended until the bankruptcy proceedings end.
However, bankruptcy is not a ‘get out of jail free card for your unpaid debts. With a Chapter 13 bankruptcy, you would still need to repay most of your debt within three to five years, although you get to keep your assets. Bankruptcy could also affect your credit score negatively. So, before you file for bankruptcy, it may be best to consult a Georgia bankruptcy attorney to determine if it is a suitable option for you.
How an Attorney Can Help
When you consult a lawyer for help with your debt default and repossession issues, your lawyer will assess the circumstances and help you determine the appropriate strategy.
Your attorney could help you take the appropriate action if your property was wrongly repossessed by filing an action in court and representing you throughout the proceedings.
If you’re falling behind on your payments, your lawyer can help you renegotiate your payment terms to benefit you. Your attorney will protect your interests during such negotiations and ensure that you do not inadvertently agree to any harsh contractual terms.
If you’re facing repossession in Rome, Dalton, or anywhere else in Northwest Georgia, and you need to get out of debt, the skilled attorneys at Bournakis & Mitchell, P.C. might be able to help. We are committed to helping our clients achieve debt-free status and live peacefully without the threat of creditor action. Contact us today, and let us help you find a way out of your financial troubles.