What canI do ifcar was taken back by the bank illegally?

I called the bank to let them know that my payment was going to be late but that it would be in by the middle of the month. They took my car before the date that I would have had the payment in by and did sent no a notice whatsoever. They said it was because of other loans not paid but those loans had nothing to do with my car. What should I do?

Asked on July 26, 2010 under Bankruptcy Law, South Dakota


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Note first that you do *not* have a right to pay late. IF you owed the payment by a certain date and did not make it on time, you are in default; the bank may be able to reposses at that time. The key issue is whether they repossess in accordance with the security agreement for  the loan, and also followed the correct  procedures. You might have the loan and security agreement reviewed by an attorney, with whom you can also discuss all the circumstances; the attorney can evaluate whether the respossession was proper.

In terms of other loan defaults: first, check the loan and security agreement on the car. Sometimes such an agreement will state that if there are other defaults, the loan may be called early, or the debtor will not have any forebearance for late payments, etc. Even if it doesn't say this, if the bank otherwise followed procedure and the terms under the agreement, it may simply be that if you've been late or defaulted on other loans, they may have legally chosen to act at their first opportunity rather than give you a break.

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