Vehicle Repossession In Georgia
Helping You Rebuild Financial Freedom
Failing to make timely auto loan payments in Georgia can put drivers at serious risk of losing their primary mode of transportation. Vehicle repossession happens quickly, but understanding state laws can help you protect your rights and explore options to keep your car.
This guide breaks down how the process works and what you need to know about vehicle repossession in Georgia.
The Basics of Vehicle Repossession In Georgia
Vehicle repossession refers to a non-negotiable act by an auto lender of taking possession of your car due to delayed car payments. Sometimes it also involves the lender auctioning your car and applying the money to the debtor’s loan.
If you miss making your car payments or default on your loan, there is a higher possibility that you are at risk of getting your car repossessed by your creditor. Several laws govern repossession.
While Georgia law does give lenders significant power to repossess vehicles, it also provides important protections for borrowers. You have rights during the repossession process, and you may have options to recover your vehicle or challenge an improper repossession.
Some of the repossession laws in Georgia include:
A Creditor Can Sue Or Repossess Your Vehicle
Under Georgia state laws, if you delay your car payments or your loan contract defaults, the car lender has the right to repossess the car. The creditor can take your car once you default on the debt, or even go to the extent of suing you for the remaining debt you owe them.
However, the vehicle should be repossessed without involving any chaos. According to Georgia laws, as long as the repossession agent doesn’t breach the peace or take the property by force, it’s regarded as perfectly legal. In Georgia, a "breach of the peace" is generally prosecuted as Disorderly Conduct under Georgia Code § 16-11-39.
A Creditor Can Garnish Your Wages and Sue You
A creditor or a lending company may levy on your bank accounts to try to collect the debt on the repossessed vehicle.
In Georgia, a car creditor has to notify you within ten days from the day of repossession. But if you decline to do so, the lender is obliged to take the vehicle back to sell it or auction it.
However, if the car sells for less than what you still owe, the creditor will come for the deficiency balance. Also, when a borrower leases a car, a loan agreement should be signed stating that the remaining loan balance will be repaid in installments.
The Vehicle Repossession Process In Georgia
The repossession process varies by jurisdiction. But in most circumstances, a lender can repossess your car any time after a failed payment. Usually, no notification is given. A repossession company will come to collect the vehicle, but without causing any damage.
Here is what the process typically looks like:
1. Default occurs — You miss a payment or break another loan term.
2. Lender hires a repo company — The lender can act fast. There is no required waiting period.
3. Vehicle is taken — The repo agent can take your car from your driveway, a parking lot, or a public street.
4. Notice is sent — After repossession, the lender must notify you in writing. This notice explains your right to redeem the vehicle.
5. Vehicle is sold — The lender will sell the car, often at auction.
6. Deficiency balance — If the sale price does not cover what you owe, you may still owe the difference.
Some of the reasons that may lead to car repossession include:
Late And Missed Payments
Failing to make your payments on the due date may be considered a default on the contract. Once the contract is regarded as default, a car creditor can repossess the vehicle at any time.
Inadequate Insurance
Failing to have the proper insurance or allowing your insurance coverage to lapse may be considered a default. This may result in your vehicle being repossessed.
Car Repairs
In some instances, failing to pay your repair charges on time can force a mechanic to call a creditor on you. A creditor might be coerced into repossessing the vehicle to avoid the mechanic or body shop from making a legal claim. Ultimately, this might force you to pay for the repair cost and the amount related to keeping your car.
How To Avoid Car Repossession In Georgia
Dealing with car repossession can negatively impact your finances. Not only does it affect your daily activities, but it also greatly damages your credit score and can even make it hard to be approved for credit in the future.
Therefore, it’s imperative to understand your options. Below are some potential ways that debtors may avoid repossession.
Communicate With Your Lender
Always reach out to your lender to establish other options whenever you suspect you might miss a car payment. Some options worth considering include a modified payment program and paused payments through Fortitude.
Refinance Your Loan
If you are behind in your payments, repossession is a likely possibility. This could call for you to opt for refinancing your car loan. By doing this, your new loan will be used to pay off the existing one, allowing you to start afresh.
However, it’s important to note that refinancing is only a short-term solution and won’t address long-term payment problems. It’s a smart decision only when you are confident that you’ll be able to make your payments on time.
Voluntary Sell The Car Yourself
Voluntarily surrendering your vehicle could be the last decision you will make. It will still damage your credit score, but not as much as the repossession.
Additionally, a voluntary repossession of your car could assist you in getting more money than what the creditor would have obtained if the vehicle were sold at auction, since the creditor won’t have to hire a repo company to seize your car.
Depending on your particular situation, this could help you pay off your outstanding loans and resolve any other pending financial issues.
File Chapter 13 Bankruptcy
When filing Chapter 13 bankruptcy in Georgia, your creditor is forbidden from repossessing your motor vehicle. In other words, Chapter 13 bankruptcy can be a way to stop repossession since the automatic stay will protect your car while your case is active.
Under some circumstances, filing a Chapter 13 bankruptcy can even be a way to get your car back after it has already been repossessed. Georgia law (OCGA 10-1-36) provides the rights of the buyer and seller after the repossession of a motor vehicle sold under a retail installment contract.
You can redeem your car after repossession as long as you do so within ten days of the repossession. So, filing for bankruptcy within 10 days of repossession may be a good way to regain your car.
If you don’t respond within that 10-day period, the repossessed motor vehicle can be auctioned or sold off by the repossession company or the creditor.
A skilled bankruptcy attorney can help you protect your car.
When to Talk to an Attorney About Repossession
If your vehicle has been repossessed in Georgia — or you fear it may happen soon — speaking with a local bankruptcy attorney can help you understand your options. Cherney Law Firm, LLC, works with Georgia residents facing repossession and debt issues throughout Metro Atlanta.
Schedule a free initial consultation today to learn what steps may be available to you.
Frequently Asked Questions
Under Georgia law, a creditor can repossess a vehicle as soon as a borrower defaults on the loan contract, which most commonly occurs after a single missed or late payment. Lenders are generally not required to provide advance notice or obtain a court order before seizing the vehicle.