Title loan repossession occurs when the lender takes possession of the collateral used to secure a loan. This happens if the borrower has defaulted on their debt. The lender has a right to do this based on the terms of the title loan contract. In that contract, a lien is placed on the property, such as a vehicle or furniture, and the hard copy of the title is given to the lender for the duration of the contract.
Repayment conditions are stated in the terms of the contract. Failure to fulfill those conditions means that the ownership of the collateral is transferred to the lender. So, you have to understand the title loan repossession laws in your state before signing any agreement. For Ohians, this article will highlight the key things that they need to know.
Is There a Grace Period for Repayment In Ohio?
The typical agreement will define the default period as occurring from the moment that payment on interest or outstanding balances is late. If there is no specific language to that effect, you should assume that there is no grace period on your contract and that your property can be repossessed at any moment. Even though the repayment protections are limited in Ohio, there are consumer protections in place if your vehicle is taken by a lender or 3rd party bill collector. These protections give you due process and mandate a set amount of time you have to get the vehicle back and the fees that you can be charged in Ohio.
Does the Creditor Have to Take Me to Court to Repossess My Property?
No, far from it. According to Article 9 of the Uniform Commercial Code, so long as the lender is not “breaching the peace”, a secured lender can repossess collateral after default, either directly, or through a repo agent, or, through the judicial process, in which they seek a writ of replevin and request a sheriff to enforce it. This may occur without you even being informed that the writ has been issued. You have to obey the writ of replevin, although you may challenge it in court within five days of receiving it.
Janet from HighwayTitleLoans.com says that the lender has to pay the costs of hiring a recovery specialist or repo agent. If a breach of peace does occur, the lender has to pay damages. Therefore, it is important for the lender to ensure that there is no breach of the peace.
There is no definition of a breach of peace in Article 9, and courts tend to make determinations of whether there has been a breach of peace, based on the facts of the case. A few changes in details can result in very different determinations between two cases.
So, it is important to gather as many facts as you can if you believe there has been a breach of peace. Broadly, a breach of peace can be thought of as acts of violence, or acts likely to produce violence. If the lender breaches the peace, you have the right to ask them to leave your property, or to stop trying to repossess your property. If they refuse, you are allowed to call the police and ask them to keep the peace. You cannot, however, use the situation to try and prevent repossession.
Do What You Can To Avoid A Lender Repossession
So, if you are behind in your payments, the wisest thing to do is to speak to the lender and ask for a renegotiation of the terms, so that repossession can be prevented. If that is not possible, contact a different financing company to see if they can buy out the existing loan or refinance the current amount with more favorable terms. Just because your original title loan company doesn’t want to work with you should not lead to a situation where your vehicle is taken and sold at auction.