Car Repossession Deficiency Defense

Car repossession in Maryland is governed by strict liability laws meant to protect those who own or lease automobiles.  

Illegal practices under car repossession laws in Maryland include:

    • Breaching the peace
    • Making threats of violence
    • Harassment
    • Breaking the agreed upon contract
    • Attempt to collect repossession fees which are not authorized or without filing a Discretionary Notice
    • Improper/late filing of a required Notices of Sale or Post-Sale Accountings
    • Selling the vehicle before the required 15 day window that the buyer has a chance to redeem or reinstate the contract accorded to the “Required Notice

These laws are designed to protect you, the consumer, and they’re powerful at doing so. 

In general, if the finance company fails to comply with the relevant repossession statute, they are not entitled to a deficiency judgment when they sue you.

Car Repossession in Maryland: Two Key Statutes

The two Maryland car repossession statutes that most likely apply to a car purchased in this state are the Closed End Credit Grantor statute and Article 9 of Maryland’s Commercial Law Article. 

The statutes are designed to prevent fraud and collusion, unlawful junk fees, and other acts that violate your consumer rights. For example, the Closed End Credit Grantor statute states that: 

“If the provisions of this section, including the requirement of furnishing a notice following repossession, are not followed, the credit grantor shall not be entitled to any deficiency judgment to which he would be entitled under the loan agreement.”

Article 9 (the second most common statute in Maryland car finance contracts) also bars a deficiency judgment for violations of the statue.

In addition, it contains a provision that means the creditor could end up paying you “statutory damages” of the entire finance charge plus 10% of the purchase price if and when it violates the repossession provisions of Article 9. 

This is designed to ensure that when creditors don’t comply with the law that they are held responsible instead of you, the consumer.

The Holder Rule: Another Car Repossession Deficiency Defense

The Federal Trade Commission Holder Rule is also set up to protect you.

The Holder Rule means that if you were lied to and/or cheated by your car dealer, you can use that as a defense if the finance company sues you. 

In our experience, many people stopped paying their car loan because the car itself was a lemon, junk, and/or the dealer lied to them at the time of purchase. It’s in these cases that the Holder Rule can help.

How We Can Help

The lawyers at Holland Law Firm have extensive experience in defending car repossession deficiency claims in Maryland. Holland Law Firm also has experience suing automobile finance companies when they fail to comply with these car repossession laws Maryland has in place. 

We have gone up against some of the biggest and toughest finance companies and banks, including Ally, Chase Bank, Bank of America, Mercedes Benz Financial Services USA, Toyota Motor Credit, Nissan Motor Acceptance, Ford Motor Credit Company, and more.

If you are being pursued for money after your car was repossessed and sold, contact us today for a consultation.