Everything You Need to Know About Repossession Laws in NJ

Repossession Laws in NJ

New Jersey Repossession Laws

In the past few years, many people have struggled to keep up with the increased costs of food, housing, and cars. As a result, some bills are not paid on time.

Repossession is the seizure of secured property or collateral. It usually occurs if you miss your payments. The collateral can be a car, a real estate property, or another valuable item that the borrower pledges as a guarantee for a loan.

Lenders may take possession of your assets if you miss even one payment in New Jersey. Missed payments constitute a break in the loan contract, and you are considered in default.

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After that, the lender can sell it and use the proceeds to recover the value of the loan or lease. However, lenders must follow procedures the state outlines to conduct lawful repossessions.

A good understanding of New Jersey repossession laws is essential if you are facing repossession. To learn more, keep reading.

How Does Repossession Process Go?

The creditor will send a repossession agent to collect the property once the loan or lease is in default. An agent’s job is to seize assets, usually without warning. The agent will take possession of the asset and transport it to a storage facility.

If you are present when the repo agent arrives, you can ask if you can retrieve your personal belongings from your car. If you don’t, the repo agent will take your car with everything in it. To retrieve your belongings, you will need to contact the repossession company. The repo agent will notify the police after taking possession of your car.

Creditors must provide you with a post-repossession notice informing you of your options for reclaiming the vehicle. It might be possible for you to retrieve your vehicle by paying the outstanding balance and any applicable fees.

Will You Be Notified Before the Repossession?

Under most circumstances, New Jersey law does not require a creditor does not have to notify you or get a court order before repossessing your property. This is a common scenario when vehicle payments are missed.

If you miss a payment, the lender can repossess your property immediately. Moreover, there is no grace period required for repossession, so the lender can repossess your property even one day late.

In home foreclosures, the lender must provide notice or obtain court permission before they can take your property.

What Happens After the Repossession?

If your vehicle is repossessed in New Jersey, your lender must follow certain procedures. The lender must first notify you that your vehicle was repossessed and that you can redeem it if all outstanding payments and fees are paid. Additionally, the notice will inform you of the location of the vehicle storage facility.

If you cannot retrieve your car, it will most likely be sold at auction. The creditor will apply the proceeds from the sale to the outstanding debt. You may be responsible for the remaining balance if the proceeds are insufficient to satisfy the debt and the costs associated with the repossession. The creditor can file a lawsuit to collect the remaining balance.

You, as the debtor, will receive notice of the sale. You must be notified at least 10 days before the auction, including the location, date, and time.

What Laws Cover Repossession in New Jersey

In New Jersey, repossessions are governed by the Uniform Commercial Code (UCC), and specifically, Article 9 of New Jersey Revised Statutes Title 12A:9-601 to 12A:9-628.

Under these laws, you have the right to know the terms of your loan agreement, including your obligations and responsibilities.

Also, repossession laws allow the repossession agent to use reasonable force during repossession. But, there are certain actions they can not do. These actions include the following:

The repossession agent can’t forcibly enter your property.
They must not resort to violence.
They can’t break in (get into your garage or come through a locked gate).

During the seizure, the lender cannot breach the peace. In other words, their actions cannot cause public disturbances or be considered likely to do so. Fraud and deception are also prohibited. Finally, repossession has to occur during daylight hours.

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Can You Prevent Repossession?

You might be able to prevent repossession by communicating with your creditor about your financial difficulties. It would allow you to discuss possible solutions – such as modifying your payment plan.

If you’re struggling with more than just a car loan, consider filing for bankruptcy. An automatic stay will kick in as soon as you file, and you will be protected from collection actions, including repossession. A Chapter 7 bankruptcy can wipe out most types of debt, including credit card debts, medical bills, and personal loans. In contrast, a Chapter 13 bankruptcy will allow you to reorganize your debts.

But bear in mind that even in a Chapter 7 case, the creditor can sometimes repossess the collateral. The creditor may be able to seek relief from the automatic stay. If the court approves the relief, the creditor can proceed with repossession.

Your attorney can help you determine the best course of action and negotiate with your creditors to reach an agreement.

How Can an Attorney Help With a Repossession?

If you are facing repossession, seeking legal advice from a bankruptcy attorney can be beneficial. They can review your situation and help you understand the options available.

If necessary, an attorney can represent you in any legal actions. For instance, a creditor failing to give you advance notice of an auction could violate the Uniform Commercial Code and even the New Jersey Consumer Fraud Act.

An attorney can help you identify and pursue your legal rights and remedies.

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Want to Know More About NJ Repossession Laws? Call the Law Offices of Scott J. Goldstein

Facing repossession can be a difficult and stressful situation. However, understanding repossession laws in New Jersey can help you navigate the process.

Hiding from the repossession agents is illegal and just a temporary solution at best. But, hiring a bankruptcy attorney can be an excellent long-term solution. An attorney can help you understand your rights and options if a repossession occurs.

If you have more questions on repossession, contact the Law Offices of Scott J. Goldstein. Our bankruptcy attorneys can help you alleviate your financial issues.