What is repossession?: Repossession is when you lose your property because the creditor (the person you owe the money for the purchase of the property) comes and physically takes it from you. Repossession happens when you fall behind in your payments or fail to comply with another contractual requirement such as maintaining insurance on the collateral.
- When can they repossess?
- How can they repossess?
- What happens after my property is repossessed?
- What if the property is sold for less than the indebtedness?
- What recourse will the creditor have if I don't voluntarily pay this deficiency?
- How much of my earnings can my employer withhold?
Read your contract carefully. It explains what your rights are when you fail to make a payment ("default" on your payment). There may be a grace period written into the contract, but there may not. Most repossessions happen when the payment is not made on time.
Repossession can be accomplished by court order, replevion or self-help. Unless your contract provides otherwise, you are not entitled to notice before your property is repossessed. Household and personal property is more difficult to repossess through self help means than vehicles.
- Vehicles can be taken in the middle of the night.
- They can take it from the parking lot while you are at work.
- However, they cannot take it if doing so will cause a "breach of the peace."
A breach of the peace is when the person repossessing the property engages in any disorderly conduct or destruction of property. For example, although they can take your car out of your driveway, they cannot take it from a locked garage where they would have to break the lock to get to it. Although they can take it from the gas station while you are paying for your gas, they cannot drag you out of the car to take it.
Under Mississippi law, the creditor must notify you in writing that the property will be sold to pay off the indebtedness. This notice also gives you the opportunity to "redeem" the property. This means that you have the chance to get the property back. The notice will include information about how much you will need to pay and the deadline to pay it to redeem the property. If you cannot redeem the collateral, it will be sold.
The creditor will send you a letter asking for the difference between the amount of the indebtedness, and any expenses associated with the repossession, and the sale price of the collateral. This is called a deficiency.
The creditor can sue you in justice, county or circuit court. If sufficient proof of the indebtedness is provided, the creditor will be awarded a judgement against you for the amount of the deficiency, court cost and probably attorney fees. The judgement will be recorded as a lien against your property and it can be forwarded to your employer for attachment or garnishment of your wages. 30 days after receipt of the Writ of Garnishment, your employer is obligated to begin withholding from your wages to satisfy the judgement. Additionally, the creditor will attempt to locate assets you own to satisfy the judgement such as bank accounts and personal property. However, some assets such as checking and saving accounts from Social Security or Supplemental Security Income checks are exempted from attachment. Additionally, the $10000.00 personal property and $75000.00 or 160 acre homestead exemption is applicable.
It will depend on your earnings. State and federal law exempts 30 hours per week multiplied by the prevailing minimum wages from attachment. If your adjusted gross income doesn't exceed that amount, none of your wages can be withheld. If your income exceeds that amount, the employer is obligated to withhold the lesser of the amount your income exceeds the exempted wages and 25% of your adjusted gross income. Some unearned income, such as Social Security checks, is totally exempt from attachment.