Advice if Being Threatened with Repossession

The fact that the marshal’s office is calling you is a bit odd because auto lenders in New Jersey are able to repossess vehicles without legal process, as long as the repossession does not disturb the peace. For example, the repo man cannot force you out of your vehicle at gunpoint in order to take possession of the property; this is an extreme example, but provides a clear explanation of the type of action a creditor is prohibited from taking. If the marshal’s office is now involved, I would assume that the creditor has chosen to not proceed with "self-help" repossession, as non-judicial repossession is often called, and has filed suit against you for possession of the vehicle. While I am not very familiar with New Jersey law regarding the role of marshals in repossession proceedings, I would assume that a marshal, as an agent of the court, would not attempt to seize the property until the court enters a judgment against you and in favor of the lender. If a lawsuit has been filed against you, you should have been served with court documents, called a summons and complaint, stating the creditor’s claims and providing you with an opportunity to respond to and challenge the creditor’s statements. If you have not received a summons and complaint, or any other court documents, you may want to call your county court clerk’s office to inquire about any pending cases listing you as a defendant. For more information relating to New Jersey repossession laws go to the N.J. Motor Vehicle Commission Web site.

One of the most common reasons that a creditor may file a lawsuit for the possession of a vehicle rather than proceeding with "self-help" repossession is that the creditor cannot locate the automobile. Many consumers who are behind on their car notes and who know that repossession is imminent will hide their vehicles to try to avoid repossession, as most people depend on the cars to go to work, to take their children to school, to visit the doctor, etc. Even if they cannot afford their auto payments, these people simply cannot get by day-to-day without a vehicle, and so therefore take extreme measures to keep their cars away from the repo-man. If the creditor cannot repossess the vehicle using "self-help," it may have no choice but to file suit against the borrower for possession of the property; if the court orders the borrower to surrender the vehicle to the lender, the borrower may be held in contempt of court if he fails to turn over the property. As I mentioned previously, you should call the court clerk in your county to determine if the creditor has taken any legal action against you. If you find that a suit has been filed, I would strongly encourage you to consult with a qualified attorney in your area to discuss your rights in this situation and what steps you can take to mitigate the potential problems caused by repossession.

As for the statement by the representative of the marshal’s office that once you surrender the vehicle, you can make two payments and the creditor will return the car to you, I have never heard of such a practice. Under New Jersey law, you have a right to "redeem" the property after repossession but before the vehicle is sold by the lender, but that would generally require you to pay the creditor the full balance owed on the loan, plus the repossession costs and reasonable attorney’s fees; this amount would clearly be much more than simply making two regular payments. To be honest, the person who called you sounds more like a collector than a marshal; I would not be surprised if the person calling you was simply a collector masquerading as a court officer in order to convince you to turn over your vehicle voluntarily. Call the creditor directly and ask them if the plan described by the woman who called you is an agreement that the creditor will accept. If you are able to reach a voluntary surrender agreement with the creditor, I strongly encourage you to obtain any terms or stipulations, such as your right to reclaim the property once you make two regular payments. Having a written agreement should give you the necessary documentation to prove your case if the creditor attempts to renege on the arrangement.

You should know that if you voluntarily surrender your vehicle to your lender, the loan will still likely be reported as a repossession on your credit reports, and could thus have a strong negative impact on your credit score. Also, if you are unable to redeem the vehicle, the creditor will probably sell the vehicle and apply the sale proceeds to the balance of your current loan. If the creditor sells the vehicle for less than what you owe, as usually happens, you may be legally liable for the amount remaining on your loan after the sale proceeds are applied to the debt. This type of debt is called a "deficiency balance" and it often serves as insult on top of injury for consumers who have recently had a vehicle repossessed. If you owe a deficiency balance after your vehicle is sold by the finance company, you will probably need to work out a plan to repay the debt; if you fail to do so, the creditor may pursue legal action against you to collect the remaining debt. Because of the potential credit impact and possibility of owing a deficiency balance, you should carefully consider all of your options before voluntarily surrendering your vehicle to the lender.

Before you make any further decisions about how you want to resolve the delinquency on your automobile, I strongly encourage you to consult with an attorney in your state to discuss the situation and the best available solution. I also encourage you to call the court clerk’s office in your county to determine if a lawsuit has been filed against you by your lender, so that you know what steps you need to take to protect yourself. For more information for consumers struggling with their bills, I invite you to visit the Bills.com debt help page. I wish you the best of luck in resolving the delinquency on your vehicle, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.bills.com/