Pennsylvania Repossession Laws: What You Need to Know in 2024
Pennsylvania allows lenders to repossess your car without advance warning if you default on your loan. You have rights after repossession, including the ability to redeem your vehicle within 15 days or reinstate your loan. Filing for bankruptcy may help you recover your car and restructure your loan terms to make payments more affordable.
Get Free ConsultationRepossession happens when a lender takes back your car after you default on your auto loan. Pennsylvania has specific laws that govern this process. Understanding your rights can help you protect yourself and potentially keep your vehicle.
How Many Missed Payments Lead to Repossession in Pennsylvania?
Your lender can repossess your car if you default on your loan. Default typically means missing payments, but it can also occur if you let your required insurance lapse.
Stop Repossession With Chapter 13 Bankruptcy
Chapter 13 bankruptcy can help you recover your repossessed car and create affordable payment terms. Speak with a bankruptcy attorney today to explore your options before the vehicle is sold.
Get Free Attorney ConsultationYour loan contract sets the specific rules. Some contracts classify you as in default if you’re even one day late. Technically, your lender could start repossession after a single missed payment.
Most lenders don’t act that quickly. Repossession costs them time and money. Many will wait until you’re several payments behind. However, you need to know they have the legal right to act immediately if your contract permits it.
Will You Get Notice Before Repossession?
Pennsylvania law doesn’t require your lender to warn you before taking your car. They can repossess without advance notice if you’re in default.
You must receive notification immediately after repossession. The lender must hand-deliver a written notice or send it by certified mail. Most people receive the certified letter the next day. The notice explains what happened and outlines your next steps.
How to Prevent Car Repossession
Contact your lender immediately if you’re struggling with car payments. Ask about your options.
You may qualify for forbearance to temporarily pause payments. Your lender might negotiate better loan terms. If your lender won’t work with you, consider refinancing with another lender.
You can also work with our partner Cambridge Credit Counseling to create a comprehensive debt management plan that includes your car payment.
What Repo Companies Can and Cannot Do in Pennsylvania
Pennsylvania lenders and repo companies can take your car from many locations. However, strict limits exist on how and where they can repossess.
They can take your car from:
- Your driveway
- Grocery store parking lots
- The street
- Other public areas
They cannot take your car from:
- A locked garage
- A fenced yard with a locked gate
Repo agents cannot breach the peace. They can’t use threats, force, or cause public disturbances.
If you’re present during the repossession attempt, you can tell them to stop. If they ignore you, that constitutes breach of peace. Don’t use physical force to stop them. You could face danger or criminal charges.
Pennsylvania requires repo companies to hold licenses with the Department of Banking and Securities. You can file a complaint if a repo company breaks the rules. They could lose their license for misconduct.
Your Personal Property Rights
Pennsylvania law protects personal property left in your repossessed vehicle. You have 30 days from the repossession notice date to recover your belongings.
After 30 days, the repo company can dispose of your property however they choose. Remove valuable items from your car immediately if repossession seems likely. You’ll avoid the stress of working against this deadline.
What Happens After Your Car Is Repossessed?
The lender sends you a notice the next day after repossession. Pennsylvania’s Motor Vehicle Sales Finance Act requires specific information in this notice:
- Your right to reinstate the loan and redeem your car
- An itemized statement showing redemption or reinstatement costs
- Notice that the seller intends to sell your vehicle at least 15 days after the notice date
- Vehicle storage location information
- Name and address for payment or document service
- Statement that personal items will be held for 30 days
- Contact information for a full accounting of what you owe
Pennsylvania’s Uniform Commercial Code requires additional information:
- Names of debtor and lender
- Description of the repossessed vehicle
- Sale method (public auction or private sale)
- Time and place of sale
- Explanation that you may owe a deficiency balance
- Phone number explaining redemption requirements
- Contact information about the sale or amount owed
Consult a Pennsylvania attorney if your notice lacks required items. You may have grounds to file a claim against the lender.
Every aspect of the vehicle sale must be commercially reasonable. The sale must follow commonly accepted commercial practices. Selling the car at a properly advertised auto auction is commercially reasonable. Selling it to the lender’s relative for $1 isn’t.
When the sale doesn’t cover your loan balance plus repossession costs, you owe the difference. You’ll face a deficiency balance. You’re more likely to owe a deficiency if you’re upside-down on your loan. If sale proceeds exceed what you owe plus costs, the lender owes you the surplus.
Do You Still Owe Money After Repossession?
You’ll owe a deficiency balance if your car doesn’t sell for enough to cover your loan plus repossession costs.
You can raise defenses if the lender takes you to court for a deficiency judgment. One defense is that the sale price wasn’t reasonable or the sale wasn’t conducted fairly. The judge makes the final decision.
If the judge finds the sale price unreasonable, your deficiency or surplus gets calculated based on the reasonable vehicle value. You can sue the lender yourself if they don’t sue you. The judge will determine the vehicle’s value and calculate your deficiency balance or surplus.
Repossession costs factor into your deficiency balance. You won’t be liable for these costs if you voluntarily surrender the vehicle.
Can You Get Your Car Back After Repossession?
You can reinstate your car loan before the vehicle sells if the lender agrees. You must:
- Catch up on all missed payments
- Reach an agreement about late fees
- Agree on repossession and collection costs, including attorney fees and court costs
You also have the right to redeem the vehicle. Redemption differs from reinstatement. You need to pay the following within 15 days of the repossession notice:
- The remaining loan balance
- All legally allowed late charges
- Any other amounts collectible under your loan contract
Redeeming after 15 days requires the same payment plus repossession, repair, and storage costs.
You may avoid repossession by filing for bankruptcy. A Pennsylvania attorney can evaluate if bankruptcy is right for you. Chapter 13 bankruptcy might let you get your car back and modify your loan terms to make payments more affordable. Speak with a bankruptcy attorney for free to explore your options.
Additional Pennsylvania Repossession Resources
- Repossessions Information From PALawHELP.org
- Pennsylvania Self-Help Legal Information
- Free Legal Answers for Pennsylvanians from the American Bar Association
- Pennsylvania Legal Aid Network Providers
- Pro Bono Services from the Pennsylvania Bar Association