UCC repo laws ... which state? WhyChat??

[wekiva]

If I bought a car in State A, moved to State B 2 years later, then voluntarily gave up the car (repo) after living in State B for 6 months, which state's repo laws apply?

 

The creditor did not follow the UCC repo laws required by State B, which are very specific, but seems to have followed those required by State A, which are very generic. ("The disposition of the collateral may be conducted by public or private sale. Reasonable notice of the time and place of the sale is generally required to be given to other secured creditors and the debtor.")

 

Any help/advice will be appreciated.

 

wekiva 8)

[four20nik]

My opinion....(which may not amount to a hill of beans, lol)

 

Generally, if one resides in a state for 6 months, they become a resident of that state. Since the car was repo'd from state B territory, state B laws should apply, as you were a legal resident at that time.

 

Check state B's residency requirements

 

Now, since the contract was signed in state A, and you live in state B, any deficeincy claims can be brought in either state.

 

Was it longer than 4 years ago? SOL for deficiency is 4 years at most IF the repo was done in accordance w/ law. I am guessing they gave no notice, but since the laws of state A say "generally" when addressing notification requirements, you are worried that it is NOT requried in all cases.

 

 

 

Wait for Whychat...he's the expert!!!!

[wekiva]

My opinion....(which may not amount to a hill of beans, lol) Your opinion is always welcomed - and valued, Nik. :wink:

 

Generally, if one resides in a state for 6 months, they become a resident of that state. Since the car was repo'd from state B territory, state B laws should apply, as you were a legal resident at that time. That's kind of what I was thinking, too.

 

Check state B's residency requirements. Will do -- where do I do that? LOL

 

Now, since the contract was signed in state A, and you live in state B, any deficeincy claims can be brought in either state. Hmmm ...

 

Was it longer than 4 years ago? No, it was done 1-1/2 yrs ago.

 

SOL for deficiency is 4 years at most IF the repo was done in accordance w/ law. I am guessing they gave no notice, but since the laws of state A say "generally" when addressing notification requirements, you are worried that it is NOT requried in all cases. Yes, that is exactly what worries me. Also, the wording of the law of State A as it pertains to UCC/repo uses the words "maybe," "generally," and "might" more than once, which is scary.

 

This is a bit of an unusual situation. The car was voluntarily turned in and DH was only 30 days behind on the payments, so no notice had been given by the creditor prior to the repo. If I remember correctly, they waited a few months before they sent any correspondence at all. I'll have to find the repo file to see what type of notice they gave, if any.

 

Wait for Whychat...he's the expert!!!! Okey dokey!

wekiva 8)

[jmw]

Wait for Whychat...he's the expert!!!!

 

Not sure if it was mentioned here, but I saw one of his posts on cardreport where he announced he will be away on vacation for 2 1/2 weeks (starting about a week ago, I think?). He also mentioned that he will not be checking any sites or email during that time.

 

Just didn't want folks getting impatient since he wouldn't be responding. He's going to be one buuuuusy guy when he gets back! lol

[wekiva]

bump for Why Chat

[jmw]

bump again for Why Chat

[wekiva]

I'm still wondering about this and would love to hear Why Chat's opinion...

[Credit Please]

bump

[Why Chat]

If you changed the registration to the "new" State, the laws of that State will apply.

 

In general, the UCC § 9 laws are the same for repos, voluntary or not.

 

What papers were signed when it was turned in by you and by whomever you turned it back to? Was it turned back to an authorized rep. of the creditor in your "new" State?

 

The key to being liable for a deficiency has to do more with how the resale was done, i.e. notice of sale, accounting of proceeds demand for deficiency,rather than the repo itself.

 

Plus, what % of the original sales price had been paid? If it was more than 60% , most States do not allow a deficiency charge.

 

That is unless you signed waivers of notice of sale and accepted responsibility for a deficiency,or signed waivers of notice in exchange for their waiving any right to a deficiency.

[wekiva]

If you changed the registration to the "new" State, the laws of that State will apply. I understand.

 

In general, the UCC § 9 laws are the same for repos, voluntary or not.

 

What papers were signed when it was turned in by you and by whomever you turned it back to? Was it turned back to an authorized rep. of the creditor in your "new" State? No "papers" were signed. This was DH's voluntary repo. Against my advice, he returned it to the dealership that he bought it from (after hours -- he left a note in the car). The dealership was located in the "old" state.

 

The key to being liable for a deficiency has to do more with how the resale was done, i.e. notice of sale, accounting of proceeds demand for deficiency,rather than the repo itself.

 

Plus, what % of the original sales price had been paid? If it was more than 60% , most States do not allow a deficiency charge. According to the "current balance" listed on the statement of deficiency, less than 60% of the original sales price had been paid.

 

That is unless you signed waivers of notice of sale and accepted responsibility for a deficiency, or signed waivers of notice in exchange for their waiving any right to a deficiency. Again, nothing was signed.

 

DH didn't receive a notice of sale and didn't sign any waivers. About 1-1/2 months after the voluntary repo, DH received a repossession notification from the DMV, which included a copy of an application to secure a repossessed title. The location of the vehicle, as noted on the affidavit for repossession, was an auto auction 1000 miles away. Two months later, he received a statement of deficiency from the OC. Then, 10 days after that, he received a letter from the OC demanding the deficiency balance, which had decreased by nearly $800.

 

The amount being reported on DH's CRs increased by $1,100 after he disputed the TLs (which are being reported incorrectly).Also, I checked the statutes regarding repossession/disposition and this is what they require:

 

Disposition of the collateral may be by public or private proceedings and may be at any time and place and on any terms, but every aspect of disposition including method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value, reasonable notice of the time and place of any public sale, or the time after which any private sale is to be made, must be sent by secured party to debtor, if debtor has not signed after default, a statement renouncing or modifying right to notice of sale. No such statement is effective in the case of consumer goods. In the case of consumer goods, no other notification need be sent. In other cases, notice must be sent to any other secured party from whom secured party has received, before sending notice to debtor, written notice of claim of interest in the collateral.

 

On the original contract, it says this:

 

You agree that if any notice is required to be given to you of an intended sale or transfer of the Property, notice is reasonable if mailed to your last known address, as reflected in our records, at least 10 days before the date of the intended sale or transfer (or such other period of time as is required by law).

 

Thanks for helping me understand this and, hopefully, straighten it out.

[Why Chat]

I hope you have all the paperwork that was sent to you.

 

hat you need to do, is to get everything together and write down a "time line" - the date of "abandonment" (it was NOT a voluntary repo if the creditor did not agree, and no documents were exchanged) The date of notice and request for signed release of title,the date of the SALE, the date of notice of sale, and the date of request for deficiency.

 

You also need to look up some prices,not in the "blue book" but in the "black book" which has wholesale prices to see how "reasonable" the sale price was.

 

Once you have some data, you can then respond to a threat of a lawsuit with a reasonable defense,or dispute a CA claim.

 

How long was the original term for?

It is hard to believe that after paying for 3 years on a car that you hadn't paid in, including down payment at least 60% of the BASE sales price before finance charges taxes etc.

[wekiva]

I hope you have all the paperwork that was sent to you. I do. Not much was sent to us.

 

What you need to do, is to get everything together and write down a "time line" - the date of "abandonment" (it was NOT a voluntary repo if the creditor did not agree, and no documents were exchanged) (That's good to know. I'd never heard that before.) .

 

You also need to look up some prices,not in the "blue book" but in the "black book" which has wholesale prices to see how "reasonable" the sale price was. Where can I find this?

 

Once you have some data, you can then respond to a threat of a lawsuit with a reasonable defense,or dispute a CA claim.

 

How long was the original term for? 60 months

It is hard to believe that after paying for 3 years on a car that you hadn't paid in, including down payment, at least 60% of the BASE sales price before finance charges taxes etc. BEFORE finance charges?? I may have misunderstood. Was I doing this wrong? I was using the base sales price less the current balance as stated on the deficiency balance to determine if 60% of the loan had been paid off. Let me run some numbers ... The sum of the payments made PLUS the down payment, it looks like more than 60% of the base sales price was paid in. In fact, 74.25% was paid in. I read through the statutes (UCC) and did not see that this particular state disallows a deficiency charge. Maybe I need to study some more after I get some sleep.Thanks, again, for your input and help.

[Credit Please]

Does all the same apply to a leased vehicle ?

[Why Chat]

The lease laws for your State are different than the UCC § 9 laws, SOME of the same protections apply, but they are mostly about how the lease contract is worded.

 

Yes the 60% figure is in the UCC§9, and MAY be applicable in your State.

 

You take the original sales price, before taxes and finance charges, and deduct the net "pay-off" figure that was in existance at the time of the repo sale, they were supposed to give that to you in the accounting for the deficiency.

 

The balance due on the loan at the time DOES NOT COUNT, only what the net pay off would have been.(that is the figure that SHOULD have been used to determine your deficiency)

[wekiva]

You take the original sales price, before taxes and finance charges, and deduct the net "pay-off" figure that was in existance at the time of the repo sale, they were supposed to give that to you in the accounting for the deficiency.

 

On the statement of deficiency it says:

 

"The sale of the vehicle was not sufficient to cover the total amount you owed on the loan. An itemization of the balance and sale of the vehicle is as follows..." Then it lists the Current Balance (including total credits), less Sale Amount, plus Total Expenses (no explanation of $429 in expenses), to arrive at the Deficiency Balance.

 

The balance due on the loan at the time DOES NOT COUNT, only what the net pay off would have been.(that is the figure that SHOULD have been used to determine your deficiency)

 

Does this sound like they used the balance due on the loan or the net pay off?

 

Something doesn't look right. Using a loan calculator, I ran an amortization table and the amount they say was the "current balance" is about $3,000 more than it should be. I understand that this amount will be higher because of late payments, but the amount they claim was the current balance should have occurred about one year earlier. It looks like they didn't credit the last 12 months of payments.

 

I just checked their record with the BBB and it says, "We rate this company as having an unsatisfactory business performance record based on a pattern of alleged unethical collection practices, and a history of unanswered customer complaints. Complainants allege unethical practices concerning financing and collection on vehicle purchase contracts. Thanks for all of your help, Why Chat. I appreciate you sharing your time and expertise.

[SWEET1]

Plus, what % of the original sales price had been paid? If it was more than 60% , most States do not allow a deficiency charge.

 

REALLY???????

I would be interested in finding out more about this!!!

Can you tell mw where I could find this specific application for certain states??

 

TYIA!!! ~~SWEET~~

[niobe]

It is usually somewhere in your state statutes if you go to your states .gov page you should be able to find a link to them somewhere. What state are you in? I have had very good luck by going to lexisone.com and searching for court opinions with the keyword repossession. It is alot of reading but they mention alot of laws that you can google and find. It also helped me to know generally what would stand-up in court and what wouldn't. BTW kudos on using the search you have saved your-self from the wrath of Tee. (j/k T)

[mason]

question for ya why chat regarding the 60 % business. Suppose you pay on a car for 2 years, and nearly every dime goes towards interest, does that count? We had a repo after 2 years, and if you add up everything that we paid, that's well over 60%, but they put it all on interest. Really wondering cuz I think I'm about to get sued for a 9k deficiency.

Another question, if they didn't send the notices they were supposed to send certified, they can't really say in court that they sent them right? We don't remember what was sent to us because this was almost 2 years ago and we are looking for a loophole to get out of this.

[Why Chat]

The "60 % " solution is actually in all States UCC code to a great extent. Some States have enlarged upon it and completely prohibit ANY deficiency-- even if the sale has been carried out in a "commercially reasonable" manner. But in all States there is a greater obligation on the resale after repossession if more than 60% has been paid in.I did not stress this in my "repo deficiency" letter, as it seemed "icing on the cake",

 

In addition, in the "resource material" on my repo letter page, there is a link to a site which gives EACH STATE'S laws regarding deficiencies.

 

Here is a general overview of the UCC repo and deficiency rules.

 

Foreclosure Sales

 

The UCC requires that any sale by a creditor be held in a commercially reasonable manner. The UCC does not define the term, so it varies with the circumstances of each case. It does not require sale at the highest possible price, but at whatever price is obtained after going about the sale in a way that is commercially reasonable under the circumstances. Considerations such as the kind of collateral; its condition; the number, location, and identity of likely buyers; seasonable markets; and all other factors that would be considered by a reasonable commercial seller selling such items without regard to any foreclosure would be considered by a court in determining whether a sale was held in a commercially reasonable manner.

 

The law allows either a public or private sale. Based on the facts of each case, the lender must determine which is more reasonable commercially.

 

In most situations, however, a well advertised public auction is the preferred method of sale.

 

Regardless of the type of sale intended by the lender, it must provide reasonable notification to the debtor before any sale, which in accordance with applicable case law and a proposed law which would be effective in the year 2001, is 10 days' notice. The notice generally tells the debtor what will be sold; whether the sale will be public or private; the date, time, and place if it is a public sale, or the date after which such sale will take place if it is a private sale; the amount of the secured indebtedness; a statement that the debtor may redeem the collateral by paying the indebtedness and expenses in full before the date of the sale; and how the sales proceeds will be applied.

 

Once the sale has been held, the law sets forth the order in which the sales proceeds will be applied to the various claims. This order is:

Reasonable expenses involved in the repossesion and foreclosure.

Satisfaction of the foreclosing creditor's debt.

Satisfaction of indebtedness held by subordinate secured parties.

If there is money left over, the surplus must be turned over to the debtor. If, however, there is still a balance owed to the foreclosing creditor, the creditor can pursue the debtor for the remaining balance due. This remaining balance is called a deficiency. The secured creditor's right to pursue a deficiency may be restricted by a court if the creditor has not followed the procedures of the UCC in foreclosing its security interest.

 

If desired, in certain cases, the secured creditor may simply retain the collateral in satisfaction of the underlying debt. Provided the debtor has not paid 60 percent or more of the debt,

 

Creditor Misbehavior

 

If a creditor does not comply with the rules of the UCC, the debtor may seek appropriate sanctions in court. Such creditor misbehavior may consist of repossession prior to default, repossession with breach of the peace, failure to conduct a sale in a commercially reasonable manner, failure to notify the debtor in advance of the sale, holding an improper strict foreclosure, or obtaining a price that is too low. One sanction that can be obtained in some cases is an injunction against the foreclosure. A debtor must move quickly, however, and must realize that obtaining an injunction may be difficult.

 

A second sanction, available when disposition has already occurred, is recovery of damages in an amount equal to any loss caused by failure to comply with the rules of the UCC.

[mason]

would you recommend sending a d.v. to this ca? The sol isn't up yet, and I'm afraid of getting sued again. But if they can't cough up the proper documents, then I guess I could relax and not worry about it so much. This repo happened 5/02. We haven't heard anything from them because we moved right after that but I think we woke them up because we disputed this in november, now they have our address and now we've got 3 letters so far. I'm really worried about this.

[SWEET1]

BTW kudos on using the search you have saved your-self from the wrath of Tee. (j/k T)

 

LOL It took me 2 HOURS to find that! It really is much easier to "just ask" but I know better hee hee

 

Only wish my search on theCA reporting paid collection when you didnt pay THEM you paid OC would have produced a positive result!

 

so......ON WITH MY SEARCH!!!

 

~~SWEET~~

[old97s]

[question for ya why chat regarding the 60 % business. Suppose you pay on a car for 2 years, and nearly every dime goes towards interest, does that count? We had a repo after 2 years, and if you add up everything that we paid, that's well over 60%, but they put it all on interestquote]

 

My reading comprehension is a little slow today.

So, if the original price of the vehicle was 20K (the finance charges, taxes, late fees, etc. made the price that I was actually going to pay closer to 30K) and I have made payments already totalling over 12K, would that preclude me from a deficinecy if my car was repo'd?

[old97s]

That is unless you signed waivers of notice of sale and accepted responsibility for a deficiency,or signed waivers of notice in exchange for their waiving any right to a deficiency

 

Do they hide this in the standard paperwork when you purchase the car?

[Why Chat]

If you buy a car for -- say $20,000. and 3 years later it is repossessed and sold at auction, and the PAYOFF figure is less than $8,000,then you have 60%.

 

What you paid in, including interest and late charges is not a factor.

[Credit Please]

WhyChat,

 

DH had a lease, that turned repo original amnt Installment

 

Acct Status: Open

Monthly Payment: $0

Date Open: June, 2000

Balance: $11,297

Terms: N/A

High Balance: $27,435

Limit: N/A

Past Due: $0

Remarks: REPOSSESSION

AUTO

Payment Status: Repossession

 

Would the 60% apply in this situation