Taking a title loan on a motor vehicle will give you some quick cash, but you also will be taking the chance that the lender can repossess the vehicle if you get behind on payments. In fact, when you get your money, you will have to provide the lender an extra set of car keys in case you default on the loan, to make it easy for the lender to repossess the vehicle if necessary.
Depending on the situation, there are options that may be better than taking a title loan for people struggling with debt. For example, bankruptcy provides a way to stop repossession, often even for those who already have liens on their vehicle.
The seasoned and compassionate Ohio bankruptcy lawyers at Fesenmyer Cousino Weinzimmer in Columbus, Dayton and Cincinnati can help you understand repossession and other risks of title loans. We offer a free initial consultation to discuss your options, so talk to us before you chance losing your vehicle. Contact us online or call our offices today to set up your free consultation.
Basics of Title Loans
1) Written Agreement
Before getting a title loan in Ohio, you and the lender must sign a written agreement that states how much you are borrowing, what your interest rate will be, what can happen if you do not repay the loan, and what the lender must do before repossessing your vehicle. Most agreements will say that you are in “default” as soon as the payment is late, although the contract may provide a grace period during which default cannot be declared.
Before repossession, the lender must inform you of what is owed, and give you the chance to get your vehicle back by paying the loan and any reasonable expenses. You must be notified 10 days in advance of the time and place of the sale and have the chance to arrange to hand over the vehicle instead of having it repossessed by an agent, and you must have a chance to remove any personal property.
2) The Repossession
Secured creditors can repossess your car without a court order as long as there is no “breach of the peace” — actions which may lead to violence. If the creditor does breach the peace, you can ask the creditor to leave and stop trying to repossess your car, and you can call the police for help. You must not threaten or use force to stop the repossession.
Creditors may also file a lawsuit (called “replevin” cases) and get a court order allowing the creditor to repossess your car through legal proceedings, usually by the sheriff’s office. The court may order the repossession quickly, sometimes even before you know that a case was filed. You must follow the court’s replevin order even if you had no advance warning. To challenge the replevin order, you must file a hearing request with the court within five days of the date you receive the paperwork. You will also have to file an answer within 28 days. You should keep all correspondence and contact an attorney immediately for legal assistance.
3) After the Repossession
Creditors should send you at least two “default” notices within five business days after the repossession. The notices will explain why your car was repossessed and what you must do to get it back, usually by paying the past due amount plus late charges, costs of the repossession, and a deposit of up to two of your car payments.
At least ten (10) days before sale, the creditor must send another notice stating the time and place of the sale, the minimum price for the vehicle, and that the debtor may still owe money after the sale. It is required that the vehicle be sold for a reasonable price and that proceeds from the sale are used to pay off the loan. If the proceeds do not cover costs, the lender may file a court action to collect the balance. Keep all notices and paperwork, because any errors may give you a defense if you are sued.
4) Avoiding Repossession
There are ways to avoid repossession. Debtors can request a consumer counseling agency to try to work out a payment plan. If you cannot become current in your payments or make another arrangement with your creditor, you may be able to prevent repossession by filing bankruptcy.
Car-title loans are allowed to be included in a bankruptcy. If you list the title in your bankruptcy paperwork and show that the vehicle is worth less than or equal to what you owe on it, you probably will be able to keep the vehicle if you continue to pay the loan after your bankruptcy case closes.
Also, if your vehicle has already been repossessed, you may be able to get it back if you act promptly. Bankruptcy is a powerful legal tool that can protect you from the abuses of auto title loans. Learn how our Ohio bankruptcy law firm can help you recover and move forward.
Free Initial Consultations For Ohio Residents
When you are facing repossession, time is of the essence. Take the first step toward debt relief and contact the experienced and compassionate debt-relief attorneys at Fesenmyer Cousino Weinzimmer today for a FREE INITIAL CONSULTATION.
We know what you are going through. We will evaluate your entire financial picture by looking at your income, your debts and your goals, and we will discuss the best fit for your individual situation. We will handle every phase of the process and find what works best for you. We have helped countless Ohio residents find new hope and prevent repossession.
Delaying can only make your situation worse, so contact us online or call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today for your free consultation so we can determine what debt relief solutions will work best for you.