Unfortunately, auto lenders or repo agents can legally repossess your car. If you are more than 30-days behind, this can trigger a repossession. However, the state of Arizona enforces strict laws that make companies follow a rigid procedure before repossessing your vehicle.
Here are some key Arizona repossession laws:
| No breach of peace (ARS § 47-9609) | Repo agents cannot take your car using force, use force, threats, or violence. They must stop if you object. |
| No pre-repossession notice (ARS § 47-9609) | Creditors are not required to provide notice before repossessing your vehicle or to send a late notice. |
| Right to redeem (ARS § 47-9623) | You can redeem your vehicle by paying the total amount owed, including repossession costs. |
| Notice of sale required (ARS § 47-9613) | The creditor is allowed to sell a repossessed car. They must provide a written pre-sale notice of the private sale, including how, when, and where they sold it. |
| Deficiency liability (ARS § 47-9615) | Your problems may not end with repossession. If the sale price doesn’t cover the loan balance, the lender can pursue you for the remaining deficiency balance. |
You may believe lenders or repossession companies must go through Arizona courts to secure a repossessed vehicle. However, Arizona allows lenders to repossess your vehicle without a court order if you default on your loan payments. This is also known as self-help car repossession. Self-help car repossession may limit your ability to turn to the court for leverage and narrow your options for keeping or redeeming your vehicle.
Bankruptcy is a solution if you have income, but cannot reasonably catch up on the missed car payments before the repossession occurs. If you are facing financial hardship, our experienced Bankruptcy Attorneys can provide a free Chapter 13 bankruptcy consultation as a possible solution to cure and pay off your car loan through bankruptcy. Upon filing, the automatic stay will protect the car from an actual repossession. Then your Attorney will prepare a repayment plan between 3 to 5 years, depending on your circumstance. In some special cases, the loan can even be reduced through a “cram down” to the value of the vehicle.
To “cram down” a vehicle loan through a Chapter 13 bankruptcy, the loan must meet the following criterias:
If you can catch up on your car payments, but wish to proceed with bankruptcy to eliminate the other debts impacting your ability to make payments on essential expenses, we offer free bankruptcy consultations with your experienced Arizona Bankruptcy Attorneys for a Chapter 7 Bankruptcy filing. Through a Chapter 7, we can eliminate most of your unsecured debts to free up disposable income for your car and living expenses.
We can also explore a redemption in a Chapter 7 bankruptcy if your vehicle loan is substantially greater than the vehicle’s value. Our Attorneys will review your loan and assess the value of your vehicle to determine if you are a good candidate. If you are, you’ll be referred to a redemption company and offered the opportunity to pay off the loan at fair market value. Then our team will prepare the Motion to Redeem in conjunction with your bankruptcy petition. Our experienced Bankruptcy Attorney can discuss these options with you.
If your vehicle was just repossessed, immediately contact our Bankruptcy Attorneys at Stone Rose to promptly recover and resolve the outstanding balance owed through a Chapter 13 Bankruptcy filing. There is a 10-day right of retrieval period that begins from the date of repossession. As long as the vehicle has not been auctioned, the Bankruptcy automatic stay can stop the auction. Upon the filing of the Chapter 13 bankruptcy with a proposed plan to cure the default and pay the vehicle loan, the vehicle can be retrieved. This is a short time window and it is best to talk to an experienced Bankruptcy Attorney to assist you. There will be Attorney fees and documents needed to expedite the process.
Do not hesitate. Seek legal advice as soon as possible and let our law firm guide you through the legal process. Remember, it’s never too late to avoid auto repossession in Arizona, no matter how many missed payments you have.
There is no reason to continue paying on a vehicle loan without the vehicle. If your vehicle lender is attempting to collect on the balance, contact our Bankruptcy Attorneys to see if you can eliminate this debt and others through a Chapter 7 or Chapter 13 filing.
Typically, when a vehicle is repossessed, it is auctioned. The auction fees, tow fees, attorney fees, and collection fees will be deducted first. Then the remaining balance is applied to your loan balance. In most cases, you’re left with a big balance to pay and no vehicle to drive. This debt is a wholly unsecured debt and can be discharged through a Bankruptcy.
Whether you’re in danger of losing your car or defaulting on the loan, it never hurts to get sound legal advice to get caught up. Even if the car is gone, it is worth a conversation to eliminate the remaining debts owed. Contact Stone Rose Law and let us help you keep your car or eliminate the repossession debt. Fill out our online form or call Stone Rose Law for a free consultation from an Arizona car repossession attorney.
Simply put, if you fail to make car payments as outlined in the loan contract, you default on the loan. Once you default on the loan, the lender can repossess the car without notice.
The lender may still pursue you for any repossession costs, including legal fees, late fees, or the cost of hiring a repo company after they have taken the car.
Your car loan is technically a title loan. In other words, you take a loan for the title. The car is collateral until you pay the loan off. Once you pay the loan, your vehicle becomes personal property.
You may have a legal obligation to pay the difference between the car’s selling price and loan balance. The amount will depend on how much the lender gets for the vehicle at a public auction. The best way to avoid this scenario is to avoid repossession altogether.
If you face potential repossession, call us for a free case review. Tell us about your case, and let us answer your questions. We can help you determine the best route for your case.
