Massachusetts Car Repossession Laws

Important Note: We will evaluate your repossession case, but you must fill out the form found here.  We receive quite a few inquiries about repossession, and this is how we streamline the process.  


What happens after my car is taken? Can I get it back?

There are four options after your car gets repossessed.  A car lender only must keep a car for 20 days after repossession, so you need to plan your strategy quickly.

1. Pay missed payments to car lender

Once your car is repossessed, the lender can demand that you pay the entire loan before giving the car back.  Many lenders, however, will let a person just pay the back amount ("arrears") and repo charges to get the car back.  However, other lenders have a policy of not allowing this and demanding the whole loan balance. This is especially likely when there have been multiple repossessions.  If you have not had multiple repossessions, you can usually just call the lender, arrange to pay the arrears, and get your car back.

2. Pay entire loan off

If the lender is demanding the entire loan to give the car back, you face some stark choices.  If you have the money, you can pay the entire loan, get the title, and wipe your hands of the lender completely.  However, most people do not have the money needed to pay off their car loan in full on short notice. 

3. File Chapter 13 to get car back (and possibly "cram down" car loan)

Chapter 13 bankruptcy is the only way to force a lender to give a repossessed car back without paying them any money. If a lender is demanding that the entire loan be paid (or even if the arrears are too high to pay all at once) Chapter 13 bankruptcy forces them to take payments over time. 

Over the years, we have handled many Chapter 13 bankruptcies to force lenders to give cars back and ease other debt burdens.  However, attorneys fees and costs must be paid quickly so that the case can be filed within the 20-day period after repossession.  That usually amounts to less than $2,000, which is usually a lot better than paying off a car loan in full.  However, it is still difficult for many people.

Additionally, in Chapter 13, some car loans can be "crammed down,". This involves paying off the car--at a reduced amount based on the car's value--through the bankruptcy court.  This right only applies to cars purchased two and half years (910 days) before a bankruptcy.

If you would like, you may also submit a bankruptcy consultation form here.

4. Let car go.

As discussed immediately below, sometimes it makes more sense to just let the car go. If you decide to do this, you will often be liable for a deficiency: The difference between the loan balance plus sale charges minus the sale proceeds (or fair market value) of the car. If you have trouble paying a deficieny, you may be able to defeat it if the repossession process was faulty in some manner or by discharging it (and other debt) in a Chapter 7 bankruptcy.

Should I get your car back?

Sometimes it can be a smart financial decision to let a car go, but this doesn't come without consequences.

If you are paying a high interest rate for a deeply-under-water car, it often makes sense to just let it go (or file a Chapter 13 to cramdown the loan, as outlined above).

For many car loans, lenders must apply the fair market value of the vehicle to your loan account.  However, if the loan balance at the time of repossession is less than $2,000, the lender cannot pursue you for a deficiency after a repossession.  However, many loan balances are larger and car lenders sue to collect these claims.  People typically either negotiate these debts or file Chapter 7 or 13 bankruptcy to get discharged from the debt. 

As discussed below, there also are some circumstances in which repossession notices are illegal and can defeat the debt.  We specialize in spotting these violations. 

Have my Rights been Violated?

Maybe. There are two main ways we see in which rights are typically violated during repossession. First, you may have not received the required 21-day written notice called "Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act" before your car was seized. Second, the repossession company may have breached the peace in the course of the repossession. Breaching the peace can mean threats, coercion, and other oppressive acts committed during a repossession.

Also, a car lender may not enter onto property owned or leased by a person to repossess a vehicle without the person's permission. This is a commonly violated law in Massachusetts.

So what if my rights were violated?

This is a really key question. Laws only have meaning when people enforce them. The criminal laws are enforced by the police and prosecutor's office, but individuals have to enforce their own rights under civil law. The repossession laws I am writing about are civil laws. Enforcing rights under civil law tends to be expensive. However, some of the laws related to car repossession provide an outstanding benefit: They allow your attorney to get paid from the defendant. This is called fee-shifting and is an exception to the rule that each side pays their own legal fees.

So, what do you have to gain if you seek to enforce your rights? First, if your rights have been violated, you can get up to $1,000 in statutory damages along with whatever actual damages you incurred, which usually include the amounts you paid out of pocket for repo, towing, and storage charges. These damages can, under some circumstances, also include compensation for emotional distress.

Can my car be taken over my objection? What is a breach of the peace?

No repo company, here in Massachusetts or elsewhere, has the right to breach the peace in the course of a repossession. The reason for this is very ancient. The public peace belongs to society and its government (formerly the king) and no private person, including a repo agent, has the right to breach it.

A breach of the peace occurs when a repo agent uses force or threats of force against people or property. A repo agent also breaches the peace if he presses on with a repossession attempt after you object. The reason for this is that proceeding over an objection has the tendency to lead to violence. Despite this, this often exactly what happens: a repo attempt proceeds over a mild and confused objection.  The devil is in the details when it comes to whether this is a breach of the peace. Whether something rises to the level of a breach of the peace usually depends on what acts or threats were involved and how "bad" it all seems in a common sense sort of way.

If a breach of the peace occurred you are entitled to an amount NOT LESS than the finance charge for the car loan plus 10 percent of the principal amount. This can be a large amount of money, so free free to give us a call to discuss it if you think a repo man may have breached the peace in the course of repossessing your vehicle.

Can the repo man come onto my property?

If a repo company enters onto your property without obtaining your permission when they enter, the repossession is unlawful. Massachusetts has a special law on this topic. In most states, a repo man can come onto someone's property (like a driveway) without permission and take a car, but not here.

A repossession company needs to get your permission at the same time they come onto the property that you own or rent.  This includes a driveway or open (and, of course, closed) garage.  However, there has never been a case in Massachusetts deciding exactly what this special law means. Do they have to call ahead of time? Can they come onto your driveway, knock on your door, and then get your permission? No court has decided. This is significant because most repos happen in the following way: The repo man comes on your property, tells you he is taking your car but that it will be much easier if you just give him the keys. The reason why it will be "easier" if you comply is the interesting part. Sometimes the repo man will say that towing the car would damage it, cost more, cause a commotion, or that he will call the police if you refuse to hand over the keys. All of these threats are illegal because they all coerce your compliance, and if they are communicated over your objection, they also breach the peace.

However, even when words and actions do not rise to the level of a breach of the peace, your lack of affirmative permission for the repo company to be on your property makes the repo illegal. However, if you ultimately give up the keys, it makes for a stronger case if you gave them up because of specific threats.  Otherwise, in some circumstances, this could be interpreted as permission from you for the repo man to be on your property. 

Can you tell me more about the initial notice required by law?

You are entitled to receive the notice called "Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act" 21 days before a repossession attempt.  However, you are must receive this three times during a car loan.  If you've been behind several times during the life of your car loan, it is possible that you have received this notice along with your bill three times already before a repossession.