Maryland’s repossession laws have specific provisions designed to protect consumers from overreaching banks and finance companies. You still have protections even if your car was a “voluntary repo.” In general, the bank or finance company still has to give you notice of the time and place of the sale, still has to give you a chance to redeem your car, and most importantly, they still have to sell the car in a “commercially reasonable” manner.
Why are these rights important? Because very often, the lender will come after you for the “deficiency balance” – i.e., the amount still owing on the loan after they sell the car and apply the proceeds to the balance. And usually, if they violate the law in any way, shape, or form, they may not be entitled to get a judgment against you – in some cases, you may even be entitled to make them pay you money when they violate the law.
So as you can see, it’s important to know your rights if your car is repossessed, even if the repossession was “voluntary” because the same rights that apply to an “involuntary” repossession also apply to a “voluntary” one.
The dictionary definition of repossession makes no distinction between “voluntary” vs. “involuntary” repossessions—specifically, Black’ Law Dictionary, 9th Ed. (2009) defines “repossession” as: “The act or an instance of retaking property; esp., a seller’s retaking of goods sold on credit when the buyer has failed to pay for them. — Often shortened to repo.”
On numerous occasions, Maryland and federal Courts have decided cases involving voluntary repossessions. For example, see the following court opinions which describe voluntary repossession (emphasis added):
- MARYLAND COURT OF APPEALS:
Thereafter Credit Corp. reported to two consumer credit reporting agencies that the automobile had been voluntarily repossessed.
Jerry Bailey, his wife Constance, and Pamela Bailey then brought the instant, multiple claims action. We are concerned here only with the claim asserted by Jerry and Constance which alleged that Credit Corp. had violated the FCBA by reporting the rescission as a voluntary repossession and on which the plaintiffs obtained a jury verdict for money damages against Credit Corp.
Bailey v. Capitol Motors, Inc., 307 Md. 343, 344, 513 A.2d 912, 912 (1986)
Accordingly, a surrender was arranged on July 27, 1978, when he executed a voluntary repossession agreement. A private sale of the vehicle to the highest of three bidders was effected. Union Trust charged him for *104 storage fees of $46 and allowed him life and health insurance rebates totaling $595.39. It then computed the balance due under the contract as $4,874.60.
Union Trust Co. of Maryland v. Tyndall, 290 Md. 102, 103-04, 428 A.2d 428, 428 (1981).
- FOURTH CIRCUIT COURT OF APPEALS:
Accordingly, he attempted to refinance his tractor through various financial institutions. When this effort proved unavailing, Tousley consented to a voluntary repossession of the tractor by North American.
Tousley v. N. Am. Van Lines, Inc., 752 F.2d 96, 100 (4th Cir. 1985).
- UNITED STATES DISTRICT COURT FOR DISTRICT OF MARYLAND:
The following facts are set forth in the complaint. At some point in August 2008, HSBC attempted to repossess a truck owned by Plaintiff William Steverson in relation to a loan he obtained from HSBC. Plaintiff was told this was a “voluntary repossession.”
Steverson v. HSBC Auto Fin., Inc., CIV.A. DKC 10-3119, 2011 WL 1103164 (D. Md. Mar. 23, 2011).
Here, both Sheahy’s present suit and the earlier action filed by Primus against Sheahy relate to the deficiency owed to Primus following the voluntary repossession of her vehicle. The basis of the earlier suit was that Sheahy had defaulted on a promissory note she agreed to in her effort to repay Primus. In the present action, Sheahy’s claims focus on whether that promissory note was valid and whether notice was provided to Sheahy following the voluntary repossession of her vehicle in compliance with section 12-1021.
Sheahy v. Primus Auto. Fin. Services, Inc., 284 F. Supp. 2d 278, 281 (D. Md. 2003).
One authority has accurately described voluntary repossession as follows:
Repossession is often accomplished when the debtor voluntarily surrenders the automobile or gives the financer oral permission to pick up the automobile on his property. Sometimes the financer gets the debtor’s permission merely by explaining it wants to resell the car and credit the amount to the loan. However, this explanation does not satisfy the requirement to give notice of resale, and voluntary surrender does not waive the debtor’s right to further notice as to the time of resale.
Handling Automobile Warranty & Repossession Cases § 11:26, Thompson Reuters (2d ed.)(2010).
Click to Learn More Regarding Car Repossession in Maryland
Voluntary Repo – What to Keep in Mind
While some consumers agree to a “voluntary surrender” of their automobile and try to navigate the process with the lenders, some automobile lending companies violate other consumers’ rights, ignoring Maryland statutes implemented to protect consumers. Consumers may face abusive collection tactics even AFTER their repossessed vehicle has been sold.
If you are being harassed and pursued by a bank, finance company, or auto loan lending agency and want to protect your rights, get in touch with our team of consumer protection lawyers