New Mexico Repossession Laws: What You Need to Know
New Mexico lenders can repossess your car after just one missed payment without advance warning. Repo agents must avoid breaching the peace, but they can take your vehicle from most accessible locations. Filing for Chapter 7 bankruptcy triggers an automatic stay that immediately stops repossession and can eliminate the remaining debt.
Get Free ConsultationIn New Mexico, lenders can start repossession after just one missed payment. You won’t get advance notice before they take your vehicle. Repo agents must follow the law and avoid breaching the peace. After repossession, lenders must notify you before selling the car. You may still owe a deficiency balance if the sale doesn’t cover your loan. Filing for bankruptcy can stop or manage a repossession and help erase remaining debt.
How Many Payments Can I Miss Without Risking Repossession?
Missing just one car payment puts you in default in New Mexico. Your lender may legally start the repossession process immediately. Default typically happens when you don’t make a payment on time. It can also include other violations of your loan agreement. Not keeping required insurance on the car is a common example.
Stop Repossession With Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy triggers an automatic stay that immediately stops repossession. You could eliminate your car loan debt and get a fresh start within months.
Speak to an AttorneySome lenders offer a brief grace period. That doesn’t always stop them from considering the loan in default.
Your loan contract explains what triggers default. It should tell you when your lender can repossess your vehicle. Read it carefully to understand your rights.
Will I Be Notified Before the Repossession?
Lenders in New Mexico don’t have to warn you before repossessing your car. Some lenders might reach out first. They’re not legally required to do so. Repossession can happen without notice, even overnight or while you’re at work.
How Can I Prevent a Repossession?
Contact your lender as soon as possible if you’re struggling to make payments. Reaching out early often gives you more options. Some lenders may offer a short extension. They might let you move a payment to the end of the loan.
The situation changes once you’ve missed a payment. The lender isn’t required to accept a late or partial payment. In some cases, they may demand the full remaining loan balance. You might consider voluntary repossession if you can’t afford to catch up.
Voluntary repossession means returning the car to the lender yourself. You avoid waiting for them to take it. Voluntary repossession doesn’t erase the debt. It can reduce extra fees and help you avoid surprise repossession stress.
Filing for Chapter 7 bankruptcy can temporarily stop a repossession. An automatic stay goes into effect immediately when you file. This legal protection halts most collection efforts, including repossession. Bankruptcy erases most consumer debts, helping you reset and move forward. Some people keep their car through the process. You can speak with a bankruptcy attorney for free to explore your options.
What Can Repo Companies Do in New Mexico?
Repo agents can take your car from anywhere that’s open and accessible. This includes public streets, parking lots, or even your driveway. They’re not allowed to break the law or cause a disturbance. This is called breaching the peace.
Breaching the peace includes:
- Entering a closed garage or breaking a locked gate
- Using or threatening force
- Damaging property
You have the right to object to a repossession. The repo agent may have to leave if you speak up. They might try again later or get a court order. Stay calm if you do object. Don’t get physical or interfere with equipment. Know that objecting can increase repossession costs. You may have to pay these costs later if the repo succeeds.
Be thoughtful about where you keep your car if you’re behind. Keeping it in your own closed garage is legal. Trying to hide it in someone else’s garage could be against the law.
Only licensed repossession companies can take vehicles in New Mexico. Contact the New Mexico Financial Institutions Division if you’re unsure. They can verify whether the company was properly licensed.
Vehicles Can’t Be Repossessed From Tribal Lands Unless Tribal Law Allows
State repossession laws don’t apply if your vehicle is on tribal land. Tribal law decides whether a lender can take your car. Some tribes don’t allow repossession unless the owner gives permission. Others require an order from the tribal court. Your car may be repossessed if it leaves the reservation.
There Are Limits on Repossessing Vehicles Purchased by Service Members
Service members have special protections under federal law. The Servicemembers Civil Relief Act (SCRA) applies if you bought your vehicle before active duty. Your lender can’t repossess it during your service without a court order.
What About the Personal Property in My Car?
Try not to leave personal items in your car if repossession is possible. You’re allowed to get your belongings back after a repo. It can be a hassle though. Proving something was missing can be hard if anything gets lost.
The towing company has two business days to send a notice. They send details about where your car is stored. Double-check that your address is current with your lender and DMV. This ensures you get the notice.
The towing company must take reasonable care of your personal items. They have to let you get your belongings free of charge. You need to go during normal business hours. Bring proof that you own the car.
Contact the towing company to arrange pickup if your car is already repossessed. Your lender can tell you which company took your car.
What Happens After a Repossession?
Your lender will sell your car at a public auction or private sale. They must send you written notice before the sale. You typically get at least 10 days advance notice.
The notice must include:
- Whether the sale is public or private
- How much you owe
- How to get your car back
- Basic information about the vehicle
The notice lists the date, time, and location for public sales. You or someone you know can attend the auction. You can try to buy the car back. For private sales, the notice tells you the earliest possible sale date.
Lenders must sell repossessed vehicles in a commercially reasonable way. This means making a fair effort to advertise and get a reasonable price. This isn’t the same as full market value though.
Do I Still Owe After a Repossession?
You may still owe money after repossession and sale. This is called a deficiency balance. The sale proceeds are used to pay repossession costs first. This includes towing and storage. Next comes sale expenses like advertising or auction fees. Finally, your remaining loan balance gets paid.
You’re still on the hook for what’s left if the sale doesn’t cover everything.
Your lender must send a written explanation showing how they calculated the deficiency. This breakdown includes the resale price, the costs they charged, and your unpaid amount. You can request it if they don’t send it automatically. They must provide it within 14 days.
Your lender can sue you to collect the deficiency if you don’t pay. They may be able to garnish your wages if they win in court. They might take money from your bank account. They might also sell the debt to a collection agency. The agency could continue trying to collect what you owe.
Can I Get My Car Back After Repossession?
Redeeming your car is usually the only way to get it back. Redeeming means paying the full remaining balance on your loan. You also have to pay all extra costs related to the repossession.
Your lender must send written notice explaining how much you owe. The notice tells you how to redeem your car. This can be tough for many people. It usually requires paying everything in one lump sum. That’s a big challenge if you were already struggling with regular payments.
You have to redeem the car before the lender sells it. You likely won’t have a way to get it back once it’s sold.
Where Can I Find More Information?
These resources in New Mexico offer free legal information or support:
- New Mexico Legal Aid provides free legal advice or representation if you qualify.
- Law Help New Mexico offers free legal information and resources for low-income people.
- The State Bar of New Mexico’s Legal Resources for the Elderly Program serves residents age 55 or older.
New Mexico’s laws on default and vehicle repossession are found in the state’s Uniform Commercial Code. See Chapter 55, Article 9, Part 6 of the New Mexico Statutes.