Overview of Repossession Law, Including in New Hampshire Repossession Law
When a vehicle is purchased, there are a multitude of documents to be signed to legalize the transaction between the buyer and the seller. If the vehicle’s purchase is financed by a consumer through the usage of an auto loan lender, all signed documents regarding financing exist to protect the rights of both the consumer and the lender. Different states have different requirements as to the terms and conditions that must be specified in the contracts that are signed at the time of the sale.
One document that must be signed prior to any finalized sale is that of the Security Agreement. This is a legally binding contract that can give the loan-issuing bank the right to repossess your vehicle, should you fall behind on payments. A Retail Sales Installment Contract is a document which outlines the specific terms under which the transaction is taking place.
All repossessions performed by third-party companies that regularly repossess vehicles must be in line with the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), which protects consumers against abusive debt collection measures.
In general, when or if a repossession does occur, there are strict laws and regulations that the lender and repossession company that they hired must abide by for the repossession to be considered lawful. The repossession company must keep the peace, and must not commit what is called a breach of the peace. There should be no yelling, chaos, usage of physical violence, or verbal threats of any sort. If the local police become involved by the repossession company, and threaten to arrest the individual for failure to comply with the repossession company’s requests, or try to assist the repossession company in repossessing the vehicle, then this would be considered a breach of the peace, and it could also be considered a civil rights violation by the officers involved. Breaching the peace would be considered grounds for a lawsuit regarding a wrongful repossession.
As mentioned, most states have their own laws in place to protect both the consumer and the lending institution. These include what the creditors and repossession agencies are allowed and not allowed to do regarding the repossession of a vehicle when it is being used as collateral for an auto loan.
A Consumer’s Repossession Rights in New Hampshire
Before A Repossession May Occur
Does a right to repossession exist?
The right to repossess exists in the State of New Hampshire.
How long is it until the loan is considered in default?
Ten days past the agreed-upon payment date is when New Hampshire considers a borrower’s loan as in default.
Has the State implemented a Right to Cure?
New Hampshire is one of several states that allows the Right to Cure prior to repossession. Simply stated, this gives the borrower the right to catch up on missed payments prior to their vehicle being repossessed. A notice must be sent by the lender to the borrower with the amount that must be paid to cure the default on the loan, and avoid repossession.
Is there State-specific legislation to protect consumers?
The State of New Hampshire relies heavily on the due diligence of the creditor. Legislation holds that reasonable attempts should be made to contact the borrower regarding a defaulted loan and the borrower’s right to cure prior to repossession. All attempts to contact the borrower and collect on a debt owed must be in line with the FDCPA, and also the New Hampshire Unfair, Deceptive or Unreasonable Collection Practices Act, N.H. Rev. Stat. § 358-C, et seq. (“RSA 358-C”), both of which are consumer protection statutes.
New Hampshire protects the rights of the consumer via the Unfair, Deceptive or Unreasonable Collection Practices Act. That statute works in conjunction with the Fair Debt Collection Practices Act to ensure that consumers are not being harassed or otherwise threatened when they are contacted by debt collectors.
Repossessions in New Hampshire
Is prior notice needed to repossess?
New Hampshire is one of many states that does not require the creditor or repossession company to notify the consumer of the impending repossession, in terms of where and when the repossession will occur. If efforts have been made to contact the consumer regarding their right to cure and the loan has not been paid for at least ten days, the vehicle may legally be repossessed without prior notice to the consumer.
Is trespassing allowed? How is trespassing defined?
State law in New Hampshire allows repossession companies to go onto a consumer’s property to repossess a vehicle. However, agents are not permitted in fenced yards or locked garages without the consent of the homeowner. They are also not allowed into a borrower’s home without the borrower’s consent and they must leave the property if asked to do so.
Repossessions can occur outside of the homeowner’s property, such as at a grocery store or a mall, without notice. However, the repossession cannot occur as a result of a trick by the repossession company to get the consumer to go to an outside location – going there must have been of the consumer’s own free will.
Is video recording a repossession or an attempt to repossess legal?
The State of New Hampshire is a two-party consent state, meaning both parties in a recorded segment must have given consent to be recorded for the recording to be considered legal. However, if the cameras are located in a place where a reasonable amount of privacy would not be expected and a sign is posted regarding the recording, then recording under those circumstances would be considered lawful.
Homeowners would be within their rights to put up exterior surveillance cameras to record a repossession, as long as there is notice posted somewhere conspicuous that recording is taking place. The reasonable expectation of privacy is not expected for the entrants on a homeowner’s private property, so the recording would be permissible in a court of law, should the need arise. Borrowers might want to exercise their rights of video surveillance in the event of a repossession in New Hampshire, to ensure that any violations of the law at the time of the event are captured.
Post-Repossession in New Hampshire
Regarding Post-Repossession Notices:
- How quickly must the post-repossession notice be sent to the borrower?
An exact timeframe is not specified by the State of New Hampshire. However, post-repossession notices must be sent within a reasonable amount of time after the repossession occurs and with a reasonable amount of advanced notice of the impending sale of the vehicle.
- What details must the post-repossession notice include?
The notice of the upcoming sale at an auction must contain the auction date, time, and location of the sale of the vehicle, and a description of the vehicle.
Does the borrower have the option for the redemption of the vehicle prior to the sale?
The borrower has up to the very moment prior to the auctioneer deeming that the vehicle is “sold” to pay off the balance owed plus legal costs to redeem ownership of the vehicle.
State requirements for the sale of the vehicle – “Commercially Reasonable”:
The sale of the vehicle in New Hampshire must be considered commercially reasonable. The term “commercially reasonable” encompasses the following:
- The sale cannot take place too hurriedly or be too delayed in regard to the date of repossession; and
- The auction must be well-advertised and well-attended to be considered commercially reasonable and lawful; and
- The final sale price must be considered fair in comparison to the balance owed on the loan and the market value of the vehicle.
What are the terms and conditions of a deficiency owed or of a surplus from the sale?
Whatever the vehicle sells for, subtracted by the balance owed on the loan, is a deficiency that must be paid by the buyer. For example, if the vehicle sells for $5,000.00 and the buyer still owed $7,500.00, the deficiency to be paid by the buyer would be $2,500.00. If this deficiency is not paid, the creditor can sue the borrower in court for the balance owed. On the other hand, if the car sells for more than the value of what is owed on the loan, that surplus amount must be returned to the borrower.
What to Do if You Suspect Your Rights Have Been Compromised
Due to the fact that lenders do not require a court order to repossess a vehicle in New Hampshire, this often leads to some lenders and/or their repossession agents trying to skirt the laws set forth to protect consumers. When illegal activity occurs, the borrower has the potential option of suing the lending institution, and/or repossession company for any infringement(s) upon their rights.
If a consumer wants to sue regarding unfair debt collection practices, they may do so under the New Hampshire state law, the Unfair, Deceptive or Unreasonable Collection Practices Act for the greater of actual damages or $200, and for your attorney’s fees and costs paid. They also have the option to sue under the FDCPA for actual damages and attorneys fees and costs, and also statutory damages of up to $1,000.00.
Scenarios that May Constitute an Unlawful Repossession, Include but Are Not Limited To:
- A Breach of the Peace; and
- Personal property and real property of the consumer being damaged by repossession company; and
- Police involvement to persuade borrower to give up their vehicle; and
- Security Agreement not signed; and
- Notices after repossession and intent to sell not having been sent or having missing or inaccurate information; and
- Repossessing the wrong vehicle.
What Consumers May Be Entitled to in the Case of a Wrongful Repossession
- Damages of up to $1,000.00 in statutory damages plus your legal fees and costs paid, pursuant to the FDCPA; and
- In New Hampshire, your attorney’s fees and costs paid, plus the greater of actual damages or $200 pursuant to the Unfair, Deceptive or Unreasonable Collection Practices Act; and
- Annulment of deficiency owed or of the entire remaining balance of loan amount, in addition to 10% of the vehicle’s sale price at auction if the vehicle was sold.
A consumer may contact the Consumer Financial Protection Bureau; their respective state’s Attorney General’s Office; and a law firm, if they believe they are the victim of a wrongful repossession. No one should have their rights violated.