The Basics of TN Car Repo Laws for Memphis and Beyond
As a Memphis bankruptcy lawyer, I get a ton of questions about car repossession law in TN. The laws vary by state, so it’s important you know your rights for your area.
If you’re worried about repossession and want to understand it, here are some of the basics you need to know.
Getting Caught Up on Payments: The Right to Cure
In Tennessee, the law allows you something called a “right to cure.” This is a chance to catch up on your missed payments before a repossession.
Once you default on your auto loan, the lender is required to send you a notice that outlines your missed payments and provides a window of time to remedy the situation. This period typically ranges from 10-20 days. It gives you an opportunity to get current and avoid repossession.
That said, most of the people who contact our office can’t just magically find the money in a couple of weeks. In addition, without dealing with the underlying problem, you may end up in the same situation a few months later.
If you need a longer-term solution, bankruptcy offers a legal path to stop repossession for good.
If you fail to get caught up within the specified period, the lender can proceed with repossession. To do this, they have to follow a strict legal process.
Under Tennessee law, lenders don’t have to get a court order or notify you when repossessing your vehicle. They have the right to repossess your car at any time if you’re behind on payments. This is different from some other states and can catch people by surprise.
However, repossession agents can’t breach the peace during the process. That means they have limitations and can’t do certain things, including:
- use physical violence
- threaten you with assault or weapons
- enter or break into enclosed property
- force you out of your car
So for example, as part of these rules, agents can’t enter a locked garage without permission.
Any violation of these rules could give you the right to take legal actions against the lender. If you have any questions about these rules or want more info, get your copy of our free report Creditors Can’t Do That.
Notice of Sale
After repossession, the lender has to provide you with a notice of sale.
This notice details their intent to sell the repossessed vehicle. They have to include the date and location of the sale. It serves as a final opportunity for you to reclaim the vehicle by paying the outstanding debt.
Bear in mind, at this point the lender will likely have added repossession and storage fees. So your debt might be higher at this point than it was before.
In Tennessee, the sale has to cover the loan principal, interest, and repossession fees. If the sale of your repossessed vehicle doesn’t cover your outstanding loan balance, the lender might pursue a deficiency judgment against you.
This means you could be held responsible for the remaining balance after the sale.
Deficiency judgments can mean an additional financial burden when you least expect it. It can be infuriating to lose so much through repossession and then still owe more. It’s one of the reasons bankruptcy can be so helpful – you can get out of debt without losing your car or facing surprise debts in the future.
Bankruptcy and Repossession
Fortunately, you do have options to stop car repossession. First, you can always try to work with the car lending company. Sometimes (although rarely), they’ll offer a payment plan or help you get back on track.
However, when this option fails, you may want to consider bankruptcy. Chapter 13 can stop repossession altogether and help you get out of debt permanently. Unlike other debt payment programs, it has the power of federal and state law behind it. So the creditors can’t go back on their word or take your car out from under you.
We outline how bankruptcy stops repossession in our free report Don’t Let Them Take Your Stuff.
Getting Legal Help with Car Repossession Law in TN
If you need to stop a repossession, you should choose a lawyer who understands car repossession law in TN. They should have a reputation for client satisfaction and success.
Our award-winning team has helped thousands of people in Memphis stop repossession and get out of debt. We stand by your side every step of the way and never charge extra for phone calls, questions, and additional support. You know what you’ll get with us – a thorough, caring team who have your best interest at heart in everything we do.
That’s how we’ve earned multiple Martindale-Hubbell awards for client satisfaction, an A+ from the Better Business Bureau, and a 5-star rating on Avvo.
You don’t need to spend your life looking over your shoulder, worried you could lose your car. It’s possible to stop repossession today – and we can help.
We look forward to talking with you!