Vehicle Repossessions on the Rise for Seniors - But What Makes A Vehicle Repossession "Wrongful?"

Imagine losing your car, your primary mode of transportation for groceries, doctor appointments, and social outings. Thousands of Americans face this harsh reality each year, and a new study suggests it might be hitting older adults especially hard. For older adults, losing their vehicle can be devastating. It is even worse when the repossession is wrongful.

A recent Consumer Financial Protection Bureau (CFPB) report revealed troubling data on vehicle repossessions. The CFPB report revealed concerning trends suggesting that repossessions disproportionately affect borrowers over 50, compared to younger borrowers.

Experts offer several possible explanations. Many older adults live on fixed incomes, and unexpected medical bills or other financial setbacks can make it difficult to keep up with car payments. Additionally, some seniors may struggle with managing multiple bills or keeping track of due dates.

Losing a car can be devastating for older adults. Without reliable transportation, essential errands become a major challenge. Social isolation and a decline in overall health can also be potential consequences.

Imagine an 80-year-old who relies on their car to get to doctor appointments or visit family. Losing their car can leave them feeling stranded and helpless.

What Exactly is Vehicle Repossession?

Vehicle repossession occurs when a borrower defaults on a loan agreement, prompting the lender to reclaim possession of the vehicle. However, some repossessions are deemed "wrongful" when they violate specific legal or contractual terms. 

Not everyone who loses their car to repossession loses it fairly. While the details can vary depending on your loan agreement and state laws, there are clear rules about how repossessions should happen.

One big concern is that older adults are getting hit harder by repossessions, even though the rules are supposed to protect everyone. This can be a big problem because, for many seniors, their car is their lifeline – how they get groceries, see doctors, and stay connected.

A wrongful repossession happens when a lender takes your car without following the proper steps. For instance, lenders typically have to give you a clear warning and a chance to catch up on your payments before they can repossess your car.

Legal Grounds for Vehicle Repossession

The law primarily centers on two elements in cases of vehicle repossession: the borrower's breach of contract and the lender's upholding of the corresponding rights. A legal repossession ensues when these two aspects intersect.

Contractual Breach

When an individual finances or leases a vehicle, they sign a binding contract stipulating the payment schedule and other conditions of the agreement. Failure to adhere to these terms, most commonly by missing payments, constitutes a contractual breach, providing the lender lawful grounds to repossess the vehicle.

Lender's Rights

Lenders are granted specific rights under the contract, which, if exercised in accordance with the law, allow for the repossession of a vehicle. The lender must follow the state's repossession laws to ensure the act is not wrongful. Their rights include:

• Right to Repossess: Upon a contractual breach, a lender may have the right to take back the vehicle.
• Right to Cure: Some states allow for the opportunity to bring your loan current before the car is repossessed.
• Notice and Peaceful Repossession: depending on the jurisdiction, lenders must often provide notice to the borrower and may not breach the peace during repossession.

Every repossession case must be examined in light of the specific contract terms and applicable state laws, as these govern the actions lenders can legally take when a borrower has defaulted. Entities like forconsumers.com can provide resources and information regarding consumer rights and lender obligations during the vehicle repossession process. 

Defining Wrongful Repossession

Wrongful repossession occurs when a lender or repossession agent fails to adhere to legal and contractual terms during the vehicle repossession process. Understanding the specifics can protect consumers from illegitimate practices.

Age Discrimination 

While there are no specific laws against repossessing from seniors, the Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating based on age when making lending decisions or collection activities. If you suspect age discrimination, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

Invalid Notification

Lenders must provide proper notification before repossessing a vehicle. This typically includes a pre-repossession notice detailing the borrower's default, the amount due, and the time frame to remedy the default. Failure to send such notifications can result in a wrongful repossession. 

Consumers who have not received adequate notice often turn to wrongful repossession lawyers for assistance.

Seizing the Wrong Vehicle

Seizure of the wrong vehicle is a clear case of wrongful repossession. 

Lenders and agents must:

• Verify the identity of the vehicle before seizure.
• Ensure they have the correct vehicle as per the repossession order.

Mistakes in vehicle identification can lead to legal consequences and necessitate intervention by wrongful repossession lawyers.

Protections for Older Adults

There are no direct laws that universally protect someone with Mild Cognitive Impairment (MCI) or dementia from predatory lending practices or repossession due to forgotten payments. However, there are some legal safeguards and resources that might be helpful:

• Fair Debt Collection Practices Act (FDCPA): This federal law applies to all debt collectors, including those involved in auto loan repossession. The FDCPA prohibits deceptive and harassing collection practices. For instance, a debt collector cannot threaten you or mislead you about the consequences of non-payment.
• Capacity and Power of Attorney:  In some cases, someone with MCI or dementia may have a designated Power of Attorney who manages their financial affairs. This person is responsible for ensuring loan payments are made and could intervene in a repossession situation.
• Guardianship:  If the cognitive decline is severe, a court-appointed guardian might be necessary to manage the individual's finances and legal matters. This guardian would then be responsible for dealing with any loan defaults or repossession threats.
• Exploitation Protections:  Some states have laws against the financial exploitation of vulnerable adults, including those with dementia or cognitive decline. These laws can be complex and vary by state, but they might offer some legal recourse if someone with MCI or dementia was pressured into a loan they couldn't understand.

Here are some resources that can provide further guidance:

• National Consumer Law Center: Offers resources and publications on debt collection issues.
• National Adult Protective Services Association (NAPSA): This organization can connect you with local resources to help protect vulnerable adults from financial exploitation.
• Consumer Financial Protection Bureau (CFPB): They offer information on fair lending practices and consumer rights.

Important to Note:

• These resources are not a substitute for legal advice. Qualified attonreys can advise on the specific laws in your state and potential legal options.