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Repossession Laws In Georgia

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.

  • Calling a consumer after 9 p.m. or before 8 a.m. of the consumer’s local time; and
  • Threatening to use violence or harm to an individual or their property; and
  • Using profane language; and
  • Suing a consumer in an area that is not in the judicial district where the consumer resides, and that is not in the judicial district where the contract was signed that gave rise to the debt; and
  • Making a threat that they cannot or do not intend to act upon; and
  • Falsely representing themselves as an attorney; and
  • Making false statements regarding the consumer’s debt.

If a debt collector engages in a prohibited practice while attempting to collect a debt from a consumer, the consumer will have the right to take legal action against the debt collector. If a consumer has been sued by a third-party debt collector, or by a debt collection law firm that is representing the creditor that allegedly owns the debt, and that third-party debt collector or debt collection law firm has committed a violation(s) of the FDCPA in regard to the consumer, the consumer can file a separate lawsuit against the third-party debt collector or debt collection law firm, or the consumer can file a counterclaim in court against the debt-collector or debt collection law firm for the FDCPA violation(s).

A counterclaim is a claim that a defendant in a court case can assert in response to claims made against them by the plaintiff. If a consumer has been sued in regard to a debt, the consumer can file their own counterclaim(s) against the plaintiff within the same lawsuit. A counterclaim can be filed for violations of a federal statute like the FDCPA, or for a violation of a state law. A consumer can file a counterclaim by identifying the unlawful actions that the creditor or third-party debt collector or debt collection law firm may have engaged in during the collection process.

Pursuant to the FDCPA, consumers who believe that they are being pursued for a debt that is not theirs, or that has an inaccurate balance, and so forth, have the right to dispute the alleged debt. Within 30 days of receiving a validation notice from a debt collector (a notice that a debt collector must deliver to a consumer within five days after its first contact with the consumer), a consumer can request validation of the alleged debt. After a consumer sends this request in writing to a third-party debt collector or debt collection law firm, the debt collector is required to stop all of its collection practices against the consumer until it can provide information to the consumer that validates the debt, such as the name and address of the original creditor and the outstanding balance that is owed.

While there is no time limit for the debt collector to validate the debt, they cannot resume their collection activity until they do so. If a third-party debt collector or debt collection law firm violates the FDCPA, such as by failing to validate a consumer’s debt and continuing to pursue them for payment, the affected consumer can take legal action by filing a lawsuit or FDCPA-counterclaim against the offending debt collector.

If a consumer files a successful lawsuit in regard to the FDCPA, or a FDCPA-related counterclaim in a lawsuit in which they have been sued by a third-party debt collector or a debt collection law firm, they are entitled to receive up to $1,000 in statutory damages, as well as actual damages, reasonable attorney’s fees, and costs.

In some instances, if a consumer’s FDCPA-related counterclaim is successful, but the alleged debt is in fact a valid one, and a judgment is entered for the plaintiff in regard to the alleged debt, the damages owed to the consumer can be subtracted by a judge from the amount that the consumer is ultimately found to owe to the creditor. It is also possible in some instances for the amount of damages that a consumer is owed to be greater than the amount that they owe to the plaintiff, resulting in a positive award for the consumer. 

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.

If a consumer is then sued by a debt collector or a debt collection law firm acting on a creditor’s behalf for a fraudulent debt, they could dispute the debt (a right provided to consumers by the FDCPA) by sending to the debt collector a consumer dispute letter and an Identity Theft Affidavit, which is a form provided by the Federal Trade Commission that allows consumers to try to prove that identity theft has occurred. Additionally, a consumer could also submit any supporting documents that they may have in order to further prove that the identity theft occurred, including, but not limited to a police report, proof of identity, and any collection letters that they may have received. The debt collector should then inform the original creditor that the creation of the debt might have resulted from identity theft. Accomplishing these tasks could possibly provide a consumer with a valid defense in regard to a debt they are being sued for, but if the collector continues with their collection efforts – or even from the beginning of any collection efforts – a consumer should consult with an attorney, as the decision to rule in a consumer’s favor or not based upon the sufficiency of any alleged evidence provided to the court ultimately rests with a judge or jury.

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.

Different types of debt have different statute of limitations periods. For example, the statute of limitations period can be different for auto loan debt, credit card debt, medical debt, and mortgage debt, amongst other types of debt. Different states can also have different statute of limitations periods for different types of contracts and different types of debt.

Once the statute of limitations period for a debt expires, a creditor cannot successfully sue a consumer for nonpayment of the debt. If a consumer promises to make a payment on an alleged debt, or makes even a small payment, it could potentially restart the clock on the statute of limitations period.

If a third-party debt collector or a debt collection law firm were to sue a consumer on behalf of a creditor for nonpayment of a debt, outside of the statute of limitations period for the debt, it could be deemed a violation of the FDCPA in regard to the debt collector, and it could also be deemed a violation of a state consumer protection law in regard to both the debt collector and the creditor depending on the state. A lawsuit against a consumer can be dismissed in court, in the court’s discretion, if the lawsuit was filed outside of the statute of limitations period for the debt.

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.