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Repossession Laws in New Hampshire

A repossession occurs when an individual who has borrowed money using collateral has their collateral taken back by a creditor after failing to make loan payments. Each state has different repossession laws and they can provide the customer with rights against creditors or third-party repossession companies. Being aware of the state-specific laws in New Hampshire can help consumers if they find themselves in this difficult situation.

Is breach of the peace illegal in New Hampshire?

Yes. In New Hampshire, while a repossession company has the freedom to choose how they conduct a repossession, the state requires that the act has to be carried out without a breach of peace. There are many possible actions done by a repossession agent that can breach the peace and violating this law is considered as an offense. To elaborate, the repossession company cannot pose a risk to a consumer when carrying out the repossession. They cannot use force or violence to prompt a consumer into giving up their vehicle and they also should not threaten to physically harm them into compliance in any way. For example, they cannot break into a consumer’s garage or forcibly remove them from a vehicle in attempts to repossess it. Furthermore, when repossessing the vehicle, the agent cannot demand a consumer’s compliance, cause a scene, or provide them with false information regarding their loans or the repossession itself. If the consumer specifically objects to the repossession company’s actions and tells them to stop the repossession, they should do as the consumer asks or risk breaching the peace. Vehicles are often repossessed at night when the owners are sleeping since they cannot confront the company if they are not awake. However, breach of the peace can still occur at night—one example of this is if the company damages a consumer’s property when repossessing their vehicle. Additionally, if the vehicle is visibly parked on a street outside or around the house, the repossession agent has the ability to collect the vehicle without informing the consumer since public streets are not considered as personal property. However, any repossession must occur without the aid of the police as the presence of a police officer is a violation of the consumer’s rights. There are rules that the repossession company must follow and if they do not adhere to the correct provisions, their actions could be seen as breaches of peace and the repossession can be considered as unlawful.

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

No. In New Hampshire, while some companies may provide a consumer with a written notice of default or give them a grace period to pay off the money they owe, they are not legally obligated to notify a consumer before repossessing their vehicle. However, in order for a repossession to lawfully occur, a consumer must actively be in default (i.e. they must be at least 10 days overdue on the balance that they owe) and have signed a valid Security Agreement with the creditor.

What can a consumer do if repossession has occurred?

The creditor still has to follow a set of rules after repossessing a consumer’s vehicle. If the consumer is present during the repossession, the company must let them retrieve their personal belongings from the vehicle. While this includes anything inside of the vehicle, it does not have to include any attachments to the vehicle. If they are not present, the creditor cannot dispose of or sell any of their personal items and has to provide them with information on where the vehicle is so that they can remove their belongings. Additionally, within the first two hours after the repossession has occurred, the repossession agent has to report the repossession to the police department of the town or city where the act occurred.

After the repossession, the creditor will most likely sell the vehicle. Before the sale occurs, they should send the consumer a notice that tells them when and where the sale will take place. If the consumer can pay off the amount that they owe prior to the sale date, they could be eligible to receive back the vehicle. When pricing the vehicle for the sale, the creditor has to ask for a commercially reasonable amount that is close to its average market value. If the vehicle is being sold at an auction, as long as the auction is well-attended, the sale price should generally be a reasonable amount. If the vehicle was sold at a price that is well below its market price, it is possible that the sale was not commercially reasonable and it could be an indication of the creditor’s wrongdoing.

After the sale is completed, the creditor should provide the consumer with a notice that tells them the final price of the vehicle, the amount of any fees accumulated by the creditor in the sale, and how much money they still owe. The money paid for the vehicle should first be used to cover the creditor’s fees and the remaining money should go towards the consumer’s balance. Depending on the amounts, the consumer may still owe a deficiency balance if their debts cannot be covered in full by the sale of the vehicle. The creditor is entitled to charging the consumer for the deficiency amount. If the vehicle ended up selling for more than the amount of the debt plus the creditor’s fees, the creditor has to provide the consumer with the surplus of money.

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

A consumer’s vehicle may have been wrongfully repossessed if they were not in default when the act occurred, if they did not enter a valid agreement with their creditor, or if they did not receive a post-repossession notice informing them about the sale of their vehicle — these could indicate that the creditor did not comply with the lawful steps of repossession and the consumer could be cleared from paying a deficiency balance. Additionally, if their vehicle was illegally repossessed (if the repossession company breached the peace), the consumer could be entitled to a compensation of up to $1,000 in statutory damages from the repossession company pursuant to the Fair Debt Collection Practices Act (FDCPA). The consumer’s legal fees and any costs could also be covered in accordance with this act, a federal law that provides consumers with protection from debt collectors.

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

A consumer protection agency in the state that the consumer lives in, the state’s 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.