When you fall behind on your car payments in South Carolina, it’s crucial to understand the repossession process and your rights. Lenders have the legal right to repossess your vehicle if you default on your loan agreement. This guide, based on information from South Carolina Legal Services, explains what you need to know about car repossession in SC.
When Can Repossession Start in South Carolina?
Generally, car repossession can begin as soon as you are a single month late on your car payment. Your loan agreement or contract will outline the terms, often stating that the lender can repossess the vehicle if you fail to make payments. This agreement typically lists your car as collateral for the loan. It’s important to review your specific contract to understand the exact terms and conditions related to default and repossession.
Will You Receive Notice Before Repossession?
Yes, in South Carolina, lenders are required to provide you with a Notice of Right to Cure before they can repossess your vehicle. This notice is legally mandated to be sent after you are 10 days late on your payment, unless your lender is a credit union.
The Notice of Right to Cure informs you of your default and gives you a specific timeframe to catch up on your payments. This period is typically 20 days from the date of the notice. If you manage to pay the overdue amount within this period, your loan is brought back into good standing, and you can continue making regular monthly payments.
It’s critical to understand that if you fall behind on payments again in the future, the lender is not obligated to send you another Notice of Right to Cure before initiating repossession proceedings.
Where Can a Lender Repossess Your Car?
Lenders in South Carolina are permitted to use “self-help” repossession. This means they can repossess your car without going to court. They can take your vehicle from various locations, such as your driveway, a public street, or even your workplace. However, the repossession must be conducted peacefully. Lenders are not allowed to breach the peace, which generally means they cannot use force, threats, or violence to repossess your car.
Can You Stop Repossession Besides Paying?
While paying the overdue amount is the most straightforward way to stop repossession, there are other potential options. If you believe there was misrepresentation or fraud involved in the car purchase or financing, you have the right to take legal action. You can file a lawsuit against the lender and request a court to issue a restraining order. This restraining order can prevent the lender from repossessing your car while the lawsuit is ongoing. This legal recourse requires demonstrating valid grounds for your claim and seeking professional legal advice immediately.
What Happens to Your Personal Belongings in the Car?
Even after your car is repossessed, your personal items inside the vehicle remain your property. You should contact the towing company or the lender to inquire about the location of your car and arrange a time to retrieve your belongings. Lenders are required to allow you to collect your personal possessions, and you are not required to sign any release forms to do so. Remember to also remove any important documents related to your loan from the vehicle.
What Happens After Repossession?
After repossessing your vehicle, the lender will send you a Notice of Sale. This notice informs you about their plans to sell or dispose of the car. South Carolina law mandates that lenders provide this Notice of Sale or disposition to you.
You have a limited time, usually 10-14 days, to redeem your car before it is sold. To redeem your vehicle, you will typically need to pay the full outstanding loan balance, including repossession and storage costs, not just the past-due payments.
Following the redemption period, the lender will sell the car in a “commercially reasonable” manner, often through auction. The proceeds from the sale are then applied to your outstanding loan balance.
Are You Still Liable for the Loan After Repossession?
Unfortunately, repossession doesn’t always eliminate your debt. If the sale price of the car is less than the total amount you owed on the loan (including repossession expenses and accrued interest), you will still be responsible for the remaining balance, known as the deficiency.
If you fail to pay this deficiency balance, the lender has the right to sue you to recover the amount. If the lender obtains a judgment against you in court, this judgment can negatively impact your credit report. It’s important to know that you have the right to challenge such a lawsuit, especially if you have defenses such as prior settlement of the debt or if the statute of limitations for filing the lawsuit has expired.
For further assistance and detailed legal advice, you can contact South Carolina Legal Services or visit LawHelp.org/SC for more resources.
Image: A set of car keys, symbolizing vehicle ownership and the potential risk of repossession.
