Repossession Laws In Georgia

When a consumer enters into a loan contract on a large purchase, such as for a vehicle, and fails to make their scheduled payments, their creditor will have the ability to repossess the good that is secured by the loan. If a consumer is under threat of repossession, being aware of Georgia’s laws regarding this issue and their limits on creditors’ actions may provide them with certain rights during the repossession process.

Is breach of the peace illegal in Georgia?

Yes. Breach of the peace is illegal for any repossession conducted in Georgia and it counts as a criminal offense. The actions that a repossession company can take when seizing a vehicle are limited by this provision. Various actions that may be considered as a breach of the peace include being violent, threatening physical harm, using force, or utilizing police aid without a proper warrant. Under this provision, repossession companies also cannot damage a consumer’s property when taking their vehicle. If the vehicle is parked outside or on the street, the company can conduct their repossession but if the vehicle is parked inside of a closed garage or gated area, the company cannot break into the consumer’s property to repossess the vehicle. Additionally, repossession companies do not have any time restraints regarding what time of day that their repossessions can occur. Because of this, a number of repossessions occur at night when they suspect that the property owner is asleep since it lessens the possibility of a breach of the peace. However, it is still possible for a nighttime repossession to breach the peace if they damage the consumer’s property while conducting the repossession. If the repossession company comes while the consumer is awake and they are present for the act, they can request for the repossession to be stopped. If the consumer does this and objects to the company’s actions, the company should comply with the individual’s request because they can risk committing a breach of the peace if they continue on with the repossession.

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

No. In Georgia, a pre-repossession notice does not have to be sent to a consumer before repossession occurs. However, a lawful repossession can only occur if the consumer has been unable to make their payments and is considered to be in default.

What can a consumer do after repossession has occurred?

After the repossession of a consumer’s vehicle, their creditor still has to follow a set of rules that will govern their actions.

Following the repossession, the creditor has to send the consumer a redemption notice that provides them with their rights, information on how to redeem their vehicle, and the total amount they owe. Their balance may include any reasonable fees collected by the creditor that was associated with the repossession. This notice has to be sent to the consumer within 10 days of the date that the repossession occurred. The creditor should also let the consumer know where the vehicle is being held so that they can retrieve any personal goods that they may have left inside of it. Although the creditor cannot keep or sell the consumer’s personal items, they can keep items that are attached to the vehicle, such as a stereo system. The consumer will be able to reclaim their vehicle, restore their pre-default rights from the original loan contract, and cure the default if they are able to pay off the total balance that they owe.

If the consumer is unable to provide the full amount, the creditor can choose to keep the vehicle as payment or sell it in a public or private sale. If the creditor chooses to keep the vehicle, the consumer may still have the ability to request that the vehicle be sold in a public auction. If the creditor chooses to hold a sale, they have to send the consumer a notice that tells them of the sale’s time and location. The consumer may still be able to redeem the vehicle if they provide the full payment for the debt before the vehicle is sold. The creditor should advertise the sale enough so that the vehicle can sell for a commercially reasonable price. Selling the vehicle for an unreasonably low price can be considered an unlawful action by the creditor. After the sale occurs, the creditor should send the consumer another notice that tells them of the price received for the vehicle, how it was applied to their debt, and any leftover debt that they still owe. Any reasonable expenses that the creditor accumulated during the repossession and the set-up of the sale should first be covered by the funds gained from the sale. After these are paid for, the remaining money can go towards the consumer’s loan balance. If the money that remains is not enough to cover the debt in full, it is possible that the consumer will be responsible for paying the difference that is leftover (which is called the deficiency balance). However, if the proceeds from the sale are enough to cover both the fees and the consumer’s total debt and there is still money left, they are entitled to receive this money from the creditor.

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

A consumer’s vehicle may have been wrongly repossessed if their creditor did not follow Georgia’s repossession laws. The repossession could have been unlawful if the creditor did not send the consumer a post-repossession notice or a pre- or post-sale notice and if this occurred, it is possible that they will not have to pay the deficiency balance. Another way that the vehicle’s repossession could have been unlawful is if the repossession company breached the peace or repossessed the incorrect vehicle. In this case, when repossessing the consumer’s vehicle, the repossession company may have violated the Federal Debt Collection Practices Act (FDCPA), which is a federal law that provides consumers with rights against the actions of unlawful debt collectors. Pursuant to this act, if the repossession company acted in an unlawful way, they could owe the consumer a compensation of up to $1,000 in statutory damages. They may also have to pay for their legal fees and any costs.

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

In the state that a consumer lives, a consumer protection agency, the 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 aid and/or determining the answers to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can also be of help to consumers.