Illinois Car Repossession Laws: What You Need to Know in 2024

Repossession happens when your lender takes back your car after you default on payments. Illinois has specific laws that govern every step of the process. Understanding your rights can help you protect yourself when you fall behind on car payments.

How Many Missed Payments Before Repossession in Illinois?

You could lose your car after missing just one payment in Illinois. State law allows lenders to repossess a vehicle as soon as you default on your loan.

Auto loans are secured debt. Your car serves as collateral for the loan. If you stop making payments, the lender has the legal right to take it back and sell it.

Your loan agreement might give you some breathing room. Some contracts include a grace period after the due date. Others may allow more than one missed payment before taking action.

Check your loan documents to know exactly where you stand. They spell out how default is defined and whether you have any grace period.

Will You Get Notice Before Repossession?

Illinois law doesn’t require lenders to notify you before seizing your car. Once they take it, they must notify you within three days by mail.

The notice explains your options for getting your car back. You have two main choices based on how much you’ve paid:

• If you’ve paid at least 30% of your loan, you can redeem the car. You must make the missed payments and pay repossession costs within 21 days.

• If you’ve paid less than 30%, you can purchase the car before the lender sells it. You must pay the full loan balance plus repo fees.

You get an additional 21 days to send an answer explaining why your car shouldn’t be repossessed. The lender can disregard your answer if they disagree.

How to Prevent Repossession

Stay in contact with your lender before you fall behind. Many lenders will grant an extension or create a new payment plan. They’re much more likely to help if you reach out before missing payments.

If you’re already struggling with multiple debts, our partner Cambridge Credit Counseling can help you create a manageable payment plan.

What Repo Companies Can and Cannot Do in Illinois

Once you’re late on a payment, your lender or a repo company they hire can take your car. Illinois law doesn’t require advance notice before repossession.

Repo companies must follow specific rules:

• They cannot enter your home or garage without permission.

• They can take the car from your driveway, yard, or street.

• They can seize it from public places like parking lots.

• They cannot breach the peace by using or threatening violence.

• They cannot use deceptive tactics to trick you.

You cannot use force or threats to stop a repossession. Blocking the repo agent could lead to criminal charges against you.

Illinois requires all repo agents to have a license. You can ask them to show proof of their license.

If you believe a repo company broke the rules, talk to an attorney. They can advise you on whether you have a claim.

What About Personal Items in Your Car?

Remove your personal belongings before repossession if possible. You’ll avoid the hassle of retrieving them later.

If your car is taken with items inside, the notice should explain how to get them back. The repo company must set up a time for you to collect your property.

Illinois law doesn’t specify how long they must hold your belongings. Contact your lender for help if the repo company refuses to return your property.

What Happens After Repossession in Illinois?

Your lender will usually sell the vehicle at a public auction. The notice you receive will give you auction details. You can purchase the car up until the auction.

If the car sells for less than you owe, you pay the remaining balance. The deficiency balance includes what’s left on the loan plus repossession costs.

Repossession costs include lender fees, storage, and towing. If you have an upside-down loan, you’ll likely face a high deficiency balance.

The lender must sell the vehicle in a commercially reasonable manner. They must properly advertise the sale and hold a fair auction.

Do You Still Owe Money After Repossession?

You’ll likely owe money after the lender sells your car. You’re responsible for the remaining loan balance and all repossession costs.

You can minimize these costs through voluntary repossession. Give your car back before the lender seizes it.

Voluntary repossession doesn’t eliminate the deficiency balance. But you’ll pay considerably less in extra fees since the lender won’t hire a repo company.

Can You Get Your Car Back After Repossession?

You can purchase your car until it’s sold at auction. If you’ve paid at least 30% of your loan, you have 21 days to pay back missed payments.

If you haven’t paid 30% or you miss the 21-day window, you have 21 days to pay off the full loan.

Additional Resources for Illinois Repossession Laws

• Illinois Legal Aid Online provides information on car repossession and wrongful repossession cases.

• The Lawyers Trust Fund of Illinois offers legal aid and representation in repossession cases.

• Illinois Code on Repossession outlines regulations repo companies must follow in Illinois.