Arkansas Repossession Laws: Your Rights in 2024

In Arkansas, lenders can repossess your vehicle without warning. Default on your loan and they can act immediately.

One missed payment could trigger repossession. They don’t need a court order or special license to take the car. The only requirement: they can’t breach the peace during repossession.

Stop Arkansas Repossession With Bankruptcy

Filing Chapter 7 bankruptcy triggers an automatic stay that stops repossession immediately. Find out if you qualify for a fresh start and debt elimination.

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After your car is taken, the lender can sell it. You may owe the remaining loan balance plus repo costs. You can avoid or delay repossession by working with your lender. Filing bankruptcy can temporarily stop collection actions.

How Many Payments Can You Miss Before Repossession?

Your lender can repossess your vehicle as soon as you default. What counts as default? Your loan agreement spells out the terms.

No specific terms in your contract? A missed or partial payment could trigger default immediately.

Arkansas law gives lenders broad authority. You could lose your car after just one late payment.

Will You Get Notice Before Repossession?

Arkansas law doesn’t require advance notice before repossession. Lenders can take your car without warning you first.

Some lenders choose to send a notice anyway. Repossessions cost them money too. They may prefer to work things out.

If you receive a warning from your lender, act fast. You may have one last chance to avoid repossession.

How to Prevent Repossession

Contact your lender as soon as you fall behind. Many lenders offer short-term payment plans. You can make up missed payments and keep your car.

Still current but worried about falling behind? Taking action early protects your vehicle.

Arkansas doesn’t require lenders to give you a cure period. You won’t get a guaranteed chance to catch up after missing payments.

Filing Chapter 7 bankruptcy may offer relief if you’re overwhelmed by debt. Bankruptcy triggers the automatic stay. Collection efforts stop temporarily, including repossession. You gain time to figure out your next steps.

Need help exploring bankruptcy options? Speak with a bankruptcy attorney for free to see if you qualify.

What Can Repo Companies Do in Arkansas?

Repo companies can take your car from public or private property. Your driveway, a parking lot, even your workplace parking spot.

The catch: they can’t breach the peace. No force, no threats, no breaking into locked areas.

Lenders don’t need to notify you first. The repo agent doesn’t need a special license. They don’t have to show ID either.

Unsure if the repossession is legitimate? Contact your lender directly. Confirm they authorized it.

If you’re present during repossession, stay calm. Avoid confrontation. Physically stopping the repo could lead to added costs or legal trouble.

Getting Your Personal Property Back

Take important items out of your car before repossession if possible. You’ll avoid hassles later.

After repossession, you still have rights to your belongings. Arkansas law protects certain personal items.

Towing and storage companies can’t charge you for these items:

Your phone
Wallet
Medications
Legal documents

These must be returned at no cost.

Haven’t heard about getting your stuff back? Contact your lender or the repo company. They’ll tell you how and when to collect your items.

What Happens After Repossession in Arkansas?

After repossessing your vehicle, lenders can sell it. They choose between a private sale or public auction.

Either way, the sale must be commercially reasonable. Your lender must make a good-faith effort to get a fair price.

They can also lease or keep the car. But they must act within a reasonable time. Delays that lower the car’s value aren’t reasonable. High storage costs from delays aren’t reasonable either.

Your lender must send written notice before selling. The notice includes:

Whether the sale is private or public auction
Time and place of sale (if public auction)
Phone number for more details

Public auction? You can attend and bid on your car.

After the sale, the money goes toward specific costs first. Repossession and sale expenses come first. Then the remaining loan balance.

Money left over? That surplus belongs to you. Sale doesn’t cover everything? You owe the difference.

Do You Still Owe After Repossession?

You may still owe money after repossession. The car sells for less than your loan balance and repo expenses? The remaining balance is called a deficiency.

Deficiency amounts can include:

Unpaid loan balance
Towing costs
Storage fees
Sale-related expenses

Your lender must send a written explanation. They show how they calculated what you owe. Contact information comes with it if you want more details.

Don’t pay the deficiency? Your lender can take legal action. If they win in court, they may garnish your wages. Other collection methods could follow.

Facing repossession and your car is worth less than you owe? Consider voluntarily surrendering the vehicle. You’ll still owe the deficiency balance. But you avoid extra repo fees being added to your debt.

Struggling with deficiency balances and other debts? A bankruptcy attorney can explain your options for eliminating these debts.

Can You Get Your Car Back After Repossession?

You might be able to redeem your car. Redemption means getting it back after repossession.

You’ll need to pay everything you owe in full. Not just missed payments. Your remaining loan balance plus all repo-related costs.

Redemption requires a lump-sum payment. Most people find this difficult.

The written notice before sale includes a phone number. Call to find out exactly how much you need to redeem the vehicle.

Once the car sells? You usually can’t get it back.

More Information About Arkansas Repossession Laws

Need additional help or legal resources? These organizations can provide guidance:

Arkansas Law Help: Vehicle repossession information for Arkansas residents
Legal Aid of Arkansas: Free legal services for low-income Arkansans with civil legal problems
Center for Arkansas Legal Services: Free civil legal help for low-income Arkansas residents

Review the official statutes:

Frequently Asked Questions

What counts as default on a car loan in Arkansas?

Default depends on your loan agreement terms. If your contract doesn't specify, even one missed or partial payment can trigger default immediately. Review your loan agreement to understand what actions constitute default.

Can repo companies break into my garage to take my car in Arkansas?

No. Repo companies cannot breach the peace during repossession. They can't use force, make threats, or break into locked or secured areas like garages. They can only take vehicles from accessible locations without confrontation.

How do I get my personal belongings back after repossession?

Contact your lender or the repossession company directly. Arkansas law requires them to return certain personal items like phones, wallets, medications, and legal documents at no cost. They must tell you how and when to collect your belongings.

Can I still owe money after my car is repossessed and sold?

Yes. If the sale doesn't cover your remaining loan balance plus repossession costs, you owe the deficiency. Your lender can sue you for this amount and potentially garnish your wages if they win in court.

How can bankruptcy help stop car repossession in Arkansas?

Filing Chapter 7 bankruptcy triggers an automatic stay that immediately stops most collection actions, including repossession. This gives you temporary relief while you explore options for dealing with your debts and potentially keeping or surrendering your vehicle.

Arkansas Repossession Laws: What You Need to Know in 2024