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  6.  — Repossession Laws In Florida

Repossession Laws In Florida

In Florida, repossession can occur if a consumer begins to miss loan payments on a valid loan contract with their creditor. After a consumer is in default, the creditor has the ability to take back the item that was used to secure the loan. Within the United States, there are repossession laws that govern the actions of creditors and repossession companies, but the laws of each state vary. Becoming familiar with Florida’s provisions on repossession may help consumers if they are faced with repossession.

Is breach of the peace illegal in Florida?

Yes. Repossession companies in Florida are not allowed to breach the peace when they conduct a repossession. Breach of the peace is considered to be a criminal offense and it restricts the actions of a repossession company. There are a number of actions that a company can do to breach the peace but some examples include the use of physical force or threats of harm, giving fake information about the purpose of the repossession, and having the police intervene in a repossession without a valid warrant. In addition to these, the repossession of the consumer’s vehicle should not lead to the destruction of their personal property. While the repossession company is allowed to repossess a vehicle if it is on a public street or in an open driveway, they cannot forcibly break into a locked garage or gated area if they think the vehicle is inside. Furthermore, since repossession companies can conduct a repossession at any time of day, many repossessions happen at night when the property owners are asleep. Repossession companies do this to minimize the chance of a breach of the peace but one may still occur if they damage a consumer’s property when taking their vehicle. If the repossession occurs while the consumer is present, they have the right to ask for it to be stopped, or for the company to leave their property. If the company does not do as the consumer asks, their subsequent actions can also be counted as a breach of the peace.

Is a pre-repossession notice required to be sent to a consumer?

No. In Florida, consumers do not have to be sent a pre-repossession notice before a repossession is to occur. However, before the repossession can be conducted, a creditor must give a consumer the opportunity to voluntarily surrender their vehicle at a place and time that is convenient for both parties. If the consumer does not surrender their vehicle, the creditor can freely proceed with the repossession. Additionally, in order for the repossession to be lawful, the creditor has to make sure that the consumer has missed out on a scheduled loan payment that was within 30 days of its maturity date and that they are actively in default. The repossession company that the creditor uses also has to be licensed by the state.

What can a consumer do after repossession has occurred?

Following the repossession, the creditor still has to follow a set of guidelines for the rest of the process.

If the consumer left personal items inside of the vehicle, the creditor should give them notice of where the vehicle is and how they can reclaim these items. A creditor is not allowed to sell an individual’s personal goods but they are allowed to keep or sell any enhancements that are made to a vehicle, such as an installed stereo system.

The creditor can either choose to keep the vehicle as full payment of the consumer’s balance or they can choose to sell it. In the case that the creditor chooses to keep the vehicle, the consumer can demand that a sale occurs instead. At least 10 days before the date of the sale, the creditor has to provide the consumer with a notice that includes information on the time and place of the sale, as well as the unpaid balance on their loan plus any interest or reasonable fees collected by the creditor. If the consumer is able to pay off this full amount at any time before the sale occurs, they will be able to redeem their vehicle. After paying the debt, they will also no longer be in default and they will be able to return to having the rights of the original loan agreement that they had pre-default.

The sale of the vehicle has to be carried out in a commercially reasonable way. The selling price of the vehicle should be comparable to that of its average market value and if it is not, the creditor could be held liable for unlawful conduct. After the vehicle has been sold, the creditor should send the consumer a letter that tells them the amount that the vehicle sold for, how the proceeds were applied to their balance and any amount of remaining debt that the consumer may still owe. If the money collected from the sale is greater than the amount of their balance, the creditor has to return the excess amount of funds to the consumer. If the sale was not enough to cover the total debt, the consumer could be held liable for paying the remaining amount, also known as the deficiency balance. However, in Florida, if the outstanding balance at the time of the default was less than $2,000, the creditor cannot ask the consumer to pay the deficiency.

What happens if a consumer’s vehicle was wrongly repossessed?

In the case that a consumer’s vehicle was wrongly repossessed, it is possible that they would not have to pay the deficiency balance. An unlawful repossession may have occurred if the creditor did not afford the consumer the opportunity to voluntarily surrender their vehicle or if they did not send them a pre- or post-sale notice. The actions of the repossession company also could have rendered the repossession unlawful. They could have breached the peace or taken an incorrect vehicle. If this occurred, it is possible that the repossession company violated the Federal Debt Collection Practices Act (FDCPA), which is a federal law that provides consumers with rights against debt collectors. Pursuant to this act, the repossession company could owe a consumer compensation of up to $1,000 in statutory damages and they could also have to cover their legal fees and any costs.

Where can a consumer look for help or for answers to their questions?

A consumer protection agency in the state that the consumer lives in, the state’s Office of the Attorney General, and/or a consumer protection attorney who is licensed in a consumer’s respective state can assist a consumer with receiving help and/or determining the answers to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can also provide assistance to consumers.