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  1. #1
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    Default Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    My question involves an auto loan or repossession in the State of: Indiana

    Hello, I privately sold a vehicle in late July, by taking a vehicle on trade, as a down payment. I wrote up a contract with the buyer, signed/dated by both of us, stating that the total amount owed after trade, ($800), would be paid by August 31st. Every 10 days after that day, a $25 late fee would be added to the total amount owed. The contract states that I am the lien holder, until the debt is satisfied, listing year/make/model/VIN of the vehicle, also listing both our names and addresses on it. I transferred the title to the the buyer, listing myself as the lien holder in the proper area on the back of the title. The buyer has not made any payment, of any kind, nor has he taken the title to the license branch to be transferred. The title is not in my possession because of this. In the contract, there are no provisions about repossessions, just an amount owed, and a date it is to be paid by. I have been in contact with the buyer via Facebook messaging, (buyer says phone is shut off), and have communicated back and forth several times. I've been promised several times that he is working on getting the money, and will have it soon, but still nothing. The car is currently (I assume, if it hasn't been titled, which he has told me it hasn't been titled) improperly plated/registered, and unknown as to whether or not its insured. I have since sold the traded in car. I have not mentioned anything to the buyer about repossession or bringing the car back. Do I have the right to call the county sheriff and report that I am repossessing the car, and go get it? Or if it is impounded because of the improper registration, can I retrieve it that way?

    Forgive me if I left anything out, but I think that's pretty much it.

  2. #2
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    No, you don't get to repossess unless you wrote repossession rights into the contract.

    Without contractual repossession rights all you can due is sue for the money.

    I hope you properly notified the DMV of the sale when you sold it. If you didn't, it could by your butt if he gets into an accident.

  3. #3
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    If in fact you have a valid lien on the vehicle, as you suggest, you can repossess based upon the default of the loan secured by that lien. But... You have to follow your state's repossession laws to the letter. Also, your penalty provision is likely unenforceable. Repossession is not the process of simply taking a car back and pretending you never sold it. It's a cumbersome process that, absent redemption, ultimately requires the sale of the vehicle in a statutorily acceptable manner.

    Duties on selling a vehicle are described here. Indiana does not require that you report a sale, but as a general rule a private car seller would want to make sure that the vehicle is registered (e.g., by completing the sale at the DMV office and watching the buyer register the car) or at a minimum with your retaining a copy of the front and back of the title with all of the buyer's information. You should have retained your license plates, so I hope when you say "improperly plated/registered" that you're not talking about your plates.

  4. #4
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    I retained all of my documents, and plates from the vehicle. The buyer just slapped his plate on it from the vehicle he traded in. I also have copies of the front and back of the title, as it was filled out during the sale. My intention is not to pretend the sale never happened, but to hold the vehicle until it has been paid for, or if I'm never paid, then to go through the channels of selling the vehicle legally to cover the debt. I would prefer not to do the latter. Thank you for your help so far. As far as suing for the owed amount, I would guess the cost of legal help would be more than the owed amount, no?

  5. #5
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    The law of repossession does not permit you to "hold the vehicle until it has been paid for." It requires a series of specific steps and notices to the buyer and, ultimately, the sale of the vehicle.

    For an $800 sale, you can sue in small claims court. I would be surprised, though, if this person proves to be any better about paying a judgment.

  6. #6
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    Quote Quoting JoeyR
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    I retained all of my documents, and plates from the vehicle. The buyer just slapped his plate on it from the vehicle he traded in. I also have copies of the front and back of the title, as it was filled out during the sale. My intention is not to pretend the sale never happened, but to hold the vehicle until it has been paid for, or if I'm never paid, then to go through the channels of selling the vehicle legally to cover the debt. I would prefer not to do the latter.
    I suggest you consult an attorney before you repossess the car. I still have my doubts. The last thing you need is to get arrested for car theft. Scary, huh? That's why you make damned sure of your legal right to do it if you, indeed, have such a right.

    Moreover, there is a requirement that you notify law enforcement about the repo per Indiana Code 26-2-10:

    http://law.justia.com/codes/indiana/...le2/chapter10/

    Quote Quoting JoeyR
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    As far as suing for the owed amount, I would guess the cost of legal help would be more than the owed amount, no?
    Not necessarily. Suing for $800 in small claims court can be done without a lawyer. Fees are probably under $100 and get added to the judgment.

  7. #7
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    I have my doubts as well, not having seen the documentation that you believe gives you a valid lien.

  8. #8
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    I should explain differently that it is not my intention to hold the vehicle indefinitely. In passed experience in buy here-pay here car lots I worked at when I was younger, most of the time when they would repossess a vehicle, the buyer would magically come up with the money. But of course, if that doesn't happen in my situation, I have no intention of going around the law to settle the debt and legally get rid of the car. I am also aware of the need to contact the authorities about the repossession.
    The contract spells out, that "(my name) will be placed as a lien holder on the title, until the debt has been satisfied. Upon payment of the full amount (my name) will issue a letter stating that I no longer have any financial interest in said vehicle, and will then sign off as lien holder on the title." In addition to the contract, my name and full address/info is written in pen, in the designated area on the back of the title next to the purchaser's information. I have a copy of these things. Is that not a valid lien?
    What I gather from the posts is that I should go in front of a judge, and get a judgement against the individual. Or would it be more beneficial to try and get a court order of repossession, if that's even possible with the paperwork I have?

  9. #9
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    Default Re: Can I Repossess a Privately Sold Vehicle, Upon Default of Payment

    If you haven't at this point even researched the basics of how repossession works in your state, such that you're asking about whether "to try and get a court order of repossession", you really need to be thinking in terms of a money judgment. Again, repossession is a complex process, with lots of hurdles you must successfully cross. If you do it wrong, you can end up losing your right to recovery your losses and could potentially open yourself up to a claim by the borrower.

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