Repossession Laws In Massachusetts
Repossession occurs when a creditor or lender takes back a vehicle from a customer who has fallen behind on loan payments. Every state has different policies regarding repossession, providing the customer with rights against creditors or repossession companies. In Massachusetts, understanding these state-specific repossession laws can help a consumer overcome this difficult situation.
Is breach of the peace illegal in Massachusetts?
Yes. In Massachusetts, the state specifically identifies that a repossession has to be obtained without a “breach of peace” (MGL c.255B, § 20B). Thus, breach of peace is considered illegal in Massachusetts. When taking back a vehicle, repossession companies are not allowed to break this law, which can encompass a variety of actions. For example, when conducting the process of taking a consumer’s vehicle, a creditor cannot use violence or force or even threaten to use violence or force to execute his task. As these acts may cause harm or pose a risk to the borrower’s wellbeing, they are seen as breaches of peace. A repossession agent also cannot try to force compliance. They cannot coerce a consumer into giving up their vehicle by causing a scene, disturbing the public order or providing them with false information. If the repo man continues to take a vehicle after explicit, continued objections or an absence of affirmation from the borrower, his actions can be rendered as a breach of peace and therefore seen as illegal.
Is trespassing illegal in Massachusetts?
Yes. The repossession company cannot perform an illegal trespass. It is unlawful for a repossession agent to enter a consumer’s property without their knowledge or approval. The agent must be granted explicit permission in order to come onto their property, which includes driveways and garages. However, it is important to note that if a consumer’s vehicle is parked on a public street around their property, the repossession agent has the right to repossess the vehicle without their permission.
How does a repossession occur?
Most of the time, a creditor will contract a third-party repossession company to carry out the repossession. The repossession company can choose to conduct the repossession at any time they wish. They have the right to repossess the consumer’s vehicle from public streets and public or private parking lots, and in some states, the company can even take a consumer’s vehicle from an open driveway on their property. However, in other states, the company cannot take a vehicle from an open driveway on the consumer’s property or from anywhere on their property.
Is a pre-repossession notice required to be sent to a consumer
Yes. Before repossessing a consumer’s vehicle, a creditor has to send a notice to the borrower or else they cannot lawfully proceed with the repossession. However, if the borrower has already received a notice of default at least three times in the past, the creditor does not have to send another pre-repossession notice.
This notice of default is also regarded as a “right to cure” and it has to be titled “Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act” (MGL c.255B, § 20A). A creditor can only send the notice to the borrower after 10 days of nonpayment. In the notice, the text has to provide the borrower with a “default cure” period, which is essentially a 21-day grace period for the borrower to pay off what they owe where the creditor cannot accelerate the balance or move forward with the repossession. If the borrower successfully pays off the money that is owed, they are released from the threat of repossession and their rights under the original agreement are reestablished. However, if the borrower does not repay the indicated sum of money within 21 days, the creditor has the right to repossess the vehicle if they do so without breaching the peace. The notice of default should also include the due date for the payment and the amount that is owed.
The specific text for the body of the letter should read as follows: “’You may cure your default in (describe transaction in a manner enabling buyer to identify it) by paying to (name and address of creditor) (amount due) before (date which is at twenty-one days after notice is mailed). If you pay this amount within the time allowed, you are no longer in default and may continue on with the transaction as though no default had occurred. If you do not cure your default by the date stated above, the said creditor may sue you to obtain a judgment for the amount of the debt or, if applicable, may take possession of the collateral. If the creditor takes possession of the collateral, if any, you may get it back by paying the full amount of your debt plus any reasonable expenses incurred by the said creditor if you make the required payment within twenty days after he takes possession’” (MGL c.255B, § 20A).
What can a consumer do after the repossession has occurred?
There are still rules that a creditor has to follow after repossessing a consumer’s vehicle. Within the first hour after the repossession occurred, the creditor has to report the repossession to the police department of the town it happened in (MGL c.255B, § 20C). After the vehicle is taken, a creditor also has to send the consumer a post-repossession notice which outlines their steps moving forward with the vehicle and the consumer’s rights post-repossession.
The repossession agent cannot dispose, keep, or sell any of the consumer’s personal items that were found in the vehicle they took. They have to let them take back the personal property that may have been on or inside of the vehicle when the repossession occurred.
A creditor has to tell a consumer how much money they owe and has to wait at least 20 days before reselling or disposing of the vehicle in order to give time for them to reclaim the vehicle. In order to take back the vehicle, the consumer must pay off the full amount of money that they owe.
If the creditor chooses to resell the vehicle, they have to ask for a commercially reasonable price. After the sale of the vehicle, a consumer may still owe what is known as a “deficiency balance.” This is the amount that remains after the selling price of the vehicle is subtracted from the amount on the loan in addition to any other fees that may have accumulated during the repossession. In Massachusetts, if the amount owed after the sale price is deducted from the loan and fees is more than $2000, a creditor is entitled to seek a deficiency payment from the consumer. If the amount owed is less than $2000, a creditor cannot solicit this money from the consumer. Additionally, if the price for what the vehicle sold is greater than the price the consumer owed on the loan plus fees or expenses, then the creditor has to give the consumer the profit they made.
What happens if a consumer’s vehicle was wrongfully repossessed?
If, for the present repossession, a consumer did not receive a pre-repossession notice indicating the amount they owe and the due date for the payment (and have not received three or more notices in the past) or did not receive a post-repossession notice, this could signify that the creditor did not comply with the correct provisions of repossession. In this case, the consumer could be free from owing the deficiency. Furthermore, if the repossession was illegal (if a repossession company breached the peace, trespassed on property, etc.), the consumer could be entitled to a compensation of up to $1,000 in damages. The consumer’s legal fees and other various costs could also be covered in accordance to the Fair Debt Collection Practices Act (FDCPA), a federal law that provides consumers with protection from debt collectors.
Where can a consumer look for help or for answers to their questions
In the state that a consumer resides in, 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 help a consumer in getting help and/or determining the answer to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can assist as well.
Understanding Massachusetts Repossession Law
What Is Vehicle Repossession in Massachusetts?
Vehicle repossession can happen when a lender takes back a vehicle after the borrower defaults on a loan agreement. While repossession is legal under certain conditions, Massachusetts Repossession Law outlines strict procedures that creditors and repo agents must follow. If they violate these regulations, their actions may be unlawful.
Repossession laws exist to protect consumers from harassment, deception, and unfair treatment. Whether a consumer needs advice on stopping a pending repossession or pursuing legal action after their car has been taken, a Massachusetts Vehicle Repossession Attorney can help them understand and enforce their rights.
A Breach of Peace During a Repossession Is Illegal
One of the most important protections under Massachusetts Auto Repossession Law is that the repossession must be conducted peacefully. This is spelled out in Massachusetts General Laws Chapter 255B, § 20B. Creditors and their agents cannot breach the peace when seizing a vehicle. What can constitute a breach of the peace?
A breach of peace includes, but is not limited to:
- Using or threatening physical force; and
- Causing a scene in public or private spaces; and
- Forcing entry into locked areas like a garage; and
- Continuing the repossession despite verbal objections from the vehicle’s owner.
If a consumer’s vehicle was taken during a confrontation caused by the repo agent, or in a way that left caused the consumer to be unsafe or to be intimidated against, a Massachusetts Car Repossession Lawyer may be able to pursue damages on their behalf.
Trespassing During Repossession Is Also Unlawful
According to Massachusetts Repossession Law, it is illegal for a repossession agent to enter onto a consumer’s private property without permission. This includes the consumer’s home’s driveway, and/or garage, and/or gated area on their property. While agents can legally seize a vehicle from a public road or parking lot, they cannot trespass on a consumer’s property without their consent.
If a consumer’s car was repossessed from their private driveway or their house’s garage without warning or permission, they can contact a Massachusetts Auto Repossession Attorney for help. Trespassing can invalidate a repossession and entitle a consumer to compensation.
Pre-Repossession Notices Are Mandatory
Massachusetts law requires lenders to send pre-repossession notices before taking any repossession action to seize collateral. This notice, called a “Right to Cure” notice, must comply with MGL c.255B, § 20A.
Key features of a valid pre-repossession notice:
- It must be titled “Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act”; and
- It can only be sent after a borrower is 10 days behind on payments; and
- It must give the borrower 21 days to “cure the default” by paying the overdue amount.
If a consumer did not receive this notice(s)—or received one that does not follow legal guidelines—any repossession that follows could potentially be deemed unlawful. A Massachusetts Repossession Attorney can review the notice and determine whether the consumer’s rights were violated.
What Happens After a Repossession?
Under Massachusetts Vehicle Repossession Law, a consumer’s rights do not disappear after the car is gone. Lenders must report the repossession to the local police department within one hour of the repossession and send the consumer a post-repossession notice outlining their remaining options. This includes:
- Reclaiming personal belongings left in the vehicle; and
- Paying off the full auto loan balance (plus reasonable fees) to retrieve the car; and
- Learning when and where the car will be resold.
If the lender fails to provide this information, the repossession could be considered wrongful. A Massachusetts Car Repossession Attorney can help ensure that the post-repossession process was conducted properly.
What Is a Deficiency Balance?
Once a vehicle is sold emanating from a repossession, the lender can possibly calculate a deficiency balance—the difference between what the consumer owed and what the car was sold for, plus any fees that might exist. In Massachusetts, creditors can only pursue a deficiency balance if it exceeds $2,000. If it is under that threshold, they cannot come after the consumer for the remainder.
If a consumer believes that the price that their vehicle was sold for by the lender was unreasonably low or that the lender padded fees to inflate the deficiency, a Massachusetts Auto Repossession Lawyer can investigate the matter, and possibly dispute the alleged balance owed.
Wrongful Repossession: What Are Consumers’ Rights?
Wrongful repossession can happen for several reasons:
- A consumer never received a valid pre-repossession notice; and
- A consumer’s vehicle was taken through an unlawful trespassing onto a consumer’s property;
- There was a breach of peace that occurred during the repossession.
Consumers can also pursue claims against a lender for unfair and deceptive acts and practices, pursuant to M.G.L. c. 93A, et seq., if:
- They were not given a chance to retrieve personal items; and
- They were billed an illegal deficiency.
If a consumer has experienced any of the above, a Massachusetts Vehicle Repossession Lawyer may be able to help said consumer to recover:
- Up to $1,000 in statutory damages from the repossession tow company; and
- Compensation for out-of-pocket losses from both the repossession tow company and the auto loan lender, respectively; and
- Their legal fees and costs paid for by both the auto loan lender, and the repo agent company, pursuant to M.G.L. c. 93A, et seq., and the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), respectively.
Massachusetts Repossession Attorneys have helped numerous consumers navigate against unlawful repossession practices.
Consumers Can Take Action
A repossession occurring does not mean that a consumer is powerless. A consumer may still have legal options, and an illegal repossession lawyer’s job is to help the consumer explore those options. A wrongful repossession lawyer can do more than just explain the law—they can act on it. Whether a consumer is dealing with an aggressive lender, an illegal repossession, or an unpaid balance, a lawyer who handles illegal repossessions, and repossession-related matters, can help to protect the consumer’s rights.
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Consumers should not let a wrongful repossession dissuade them from pursuing their rights. They should reach out to a Massachusetts Vehicle Repossession Lawyer who will stand by their side, and seek justice on their behalf.