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Repossession Laws In Missouri

In Missouri, a creditor has the right to conduct a repossession if a consumer fails to make the payments that they owe on their loan agreement. After the consumer is in default, their creditor is allowed to repossess the vehicle that is secured by the loan. There are a set of laws that the creditor must follow when carrying out a repossession and being aware of Missouri’s state laws can provide the consumer with an understanding of their rights during the repossession process.

Is breach of the peace illegal in Missouri?

Yes. In Missouri, repossessions that breach the peace will be deemed unlawful. The law regarding a breach of the peace places restrictions on a repossession company’s actions and there are a number of actions that can violate this law. These actions would include the use of physical force, threats of harm, misleading statements and lies during the repossession, and the repossession company engaging the police without first obtaining a court order. The repossession company also cannot harm the consumer’s property. Although they are able to repossess vehicles that are parked on the street, they may not break into private locked garages or gated areas in order to seize a vehicle. If the consumer objects to any of the repossession company’s actions, they have the right to ask them to leave their property. If the consumer explicitly objects and the company continues to carry out the repossession, their actions can be considered to be a breach of the peace. Since repossession companies can repossess a vehicle at any hour, many choose to conduct nighttime repossessions to minimize the risk of a breach of the peace, since the property owners may be asleep. However, a nighttime repossession can still breach the peace if the repossession company harmed the consumer’s property while seizing their vehicle.

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

Yes. Creditors in Missouri must send consumers a notice called the “Notice of Default and Right to Cure” before they can repossess a vehicle. This notice can only be sent after the consumer has been in default for 10 days or more and it also provides them with a period of 20 days to cure the default. If the consumer can pay off their balance within 20 days, their vehicle will be safe from repossession. However, if they cure the first default, but then default again at another time, the creditor has to provide them with a second “Notice of Default and Right to Cure.” Like the first notice, it can only be sent if the consumer has been in default for at least 10 days and it must provide them with another 20-day period to cure the default. The second notice also details that if the consumer falls behind on their payments again, the creditor will not have to send the consumer another notice and they will not get the opportunity to cure the default. If the individual cannot cure the default during either of the 20-day periods, their creditor can proceed with the repossession.

What can a consumer do after repossession has occurred?

If a creditor repossessed a consumer’s vehicle, there are still a number of rules they must abide by for the rest of the process.

If the consumer left personal items in the vehicle, the creditor should make arrangements for them to receive these items back. The creditor does not have the right to keep or sell the consumer’s personal goods, though they may be able to keep any enhancements that were added to the vehicle, such as roof racks or stereos.

After the repossession, the creditor has to send the consumer a “Notice of Our Plan to Sell Property,” or a pre-sale notice. This notice states the creditor’s intention to file for a repossessed title and provides information on the location and date of the proposed public auction or private sale. The notice should also provide the consumer with at least 10 days to redeem the vehicle. In order to do so, they must pay off the total amount that remains on the loan, as well as late fees and possible costs accrued by their creditor. If the consumer is able to provide the full payment, they will be able to receive their vehicle back and return to their pre-default rights.

The sale of the consumer’s vehicle must be commercially reasonable. The creditor has to provide ample advertisement for the sale and they must sell it for a price that is not significantly lower than its average market value. If the vehicle sold at an unfair price, the creditor’s actions may be considered unlawful. After the sale is over, the creditor has to send the consumer a “Notice of Sale of Collateral and Possible Deficiency.” This notice should include the price that was received for the vehicle, how the funds were applied, and the amount of any debt that remains. The creditor’s expenses associated with the repossession or sale should be paid for first before the money is used towards the consumer’s debt. If the proceeds from the sale are greater than the outstanding balance, the creditor should return the surplus to the consumer. However, if the money obtained cannot fully cover the debt, the consumer may be responsible for owing the deficiency balance, which is the remainder of their debt.

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

A vehicle’s repossession may have been unlawful if the creditor did not send the consumer a “Notice of Default and Right to Cure”; a “Notice of Our Plan to Sell Property”; or a “Notice of Sale of Collateral and Possible Deficiency.” If any or all of those situations occurred, the consumer would not be responsible for owing the deficiency balance. Additionally, the actions of the repossession company may have caused the repossession to be unlawful. If the company breached the peace or repossessed the incorrect vehicle during the repossession, they may have violated the Fair Debt Collection Practices Act (“FDCPA”). The FDCPA is a federal law that places restrictions on the actions of debt collectors to help protect consumers. Pursuant to this statute, the repossession company would have to provide the consumer compensation of up to $1,000 in statutory damages. They may have to pay for their legal fees and any costs as well.

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 with receiving aid and/or determining the answers to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can also help consumers.