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  1. #1

    Default How Long After Default Can a Lender Still Repossess a Vehicle

    My question involves an auto loan or repossession in the State of: NC
    As I read different threads posted I took the time to try to research. In NC a contract is not enforceable after 3 years. That is the statute of limitations. That time starts from the first missed payment as long as no other payments are made. Every state is different but NC is one of about 5 that have the shortest time to act. The self help statutes that allow a lender to repossess property without going to court are less clear. Is there a statute of limitations on self help?

  2. #2
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    Default Re: Self Help Laws

    First let me clear up something about statutes of limitations.

    A statute of limitations is a time limit for filing a lawsuit, not for enforcing a contract.

    A person who wishes to file a lawsuit for breach of contract in NC has 3 years from the breach and, as you note, the date of the breach is typically the first missed payment.

    However, it's important to note that, to use the statute of limitations as a defense to a lawsuit it must be raised as an affirmative defense at the time of the lawsuit. In other words, if someone files suit after the 3 years expires and the defendant does not raise the affirmative defense, the plaintiff could win the lawsuit.

    In addition, there are other ways to enforce a contract besides a lawsuit. When the delinquent account gets entered on to a person's credit report it stays there for 7 years and causes that person a lot of grief and there could be many reasons why that person might decide to pay the debt after the 3 years are up.

    As for repossession, when a lender has a secured interest in the property, he is allowed by law and by his contract to repossess the property at any time without having to sue. He could theoretically do it after 3 years but I don't see any lender being stupid enough to wait that long and be out all that money so if it happens at all, it would be rare.

    When a lender repossesses he generally sells the property quickly and at a price well below market value and often below the balance owed and then he can sue for the deficiency. That lawsuit would have to be filed within 3 years of the default.

    Do you have a particular situation in mind that gave rise to your research?

  3. #3

    Default Re: Self Help Laws

    I was talking with a friend and he knew people who worked at towing companies. One of the things they would do is tow a car and wait to file paperwork. I don't remember how long it is but they got to keep a great many cars by just submitting to DMV and getting new titles in their names. I was not sure of all the details but if a lender was no longer looking for a car and a repo agent knew in the past it was out for repo he would take it and either get a new title or settle with the lien holder for pennies on the dollar. This may not be a honorable way to run a business but their are towing companies doing this so I started asking questions and decided to look at some scenarios. With the self help argument any towing company can repo a car even though the lender decided it is no longer worth their trouble to repo it and sell it at auction.

  4. #4
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    Default Re: Self Help Laws

    That's not plausible, first and foremost because unless they have a client requesting a repo they would have no idea what cars they could repo.

    The repossession is based on the lender's security interest, so the statute of limitations on the underlying debt does not prevent lawful repossession. Statutes of limitation prevent you from suing (if the defense is raised) but they don't make the debt actually go away.

  5. #5
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    Default Re: Self Help Laws

    Quote Quoting map0824
    View Post
    I was talking with a friend and he knew people
    Lots of credibility there. Not.

  6. #6

    Default Re: Self Help Laws

    So obviously I don't know all the facts but the way it was explained to me is that in NC if no action is taken after the contract is breached before the statute has expired the contract is dissolved and unenforceable by either party. The exception being if there is wording in the contract like "signed under seal" That statement extends the statute of limitations to 10 years. Even with a judgment if no payments have been made within 3 years the holder of the judgment would have to go back to court to refresh the judgment. I am sure that is not the correct legal term. NC has a lot of consumer protection laws I have been told so once 3 years go by any enforcement of a contract becomes extremely difficult if not impossible.

  7. #7
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    Default Re: Self Help Laws

    If by that, you mean that unless the defendant fails to raise the defense you cannot successfully sue for contract damages after the statute of limitations has run, that's pretty basic. That also has nothing to do with the nonsense in your second post.

  8. #8
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    Default Re: Self Help Laws

    Quote Quoting map0824
    View Post
    So obviously I don't know all the facts but the way it was explained to me is that in NC if no action is taken after the contract is breached before the statute has expired the contract is dissolved and unenforceable by either party. The exception being if there is wording in the contract like "signed under seal" That statement extends the statute of limitations to 10 years. Even with a judgment if no payments have been made within 3 years the holder of the judgment would have to go back to court to refresh the judgment. I am sure that is not the correct legal term. NC has a lot of consumer protection laws I have been told so once 3 years go by any enforcement of a contract becomes extremely difficult if not impossible.
    Anecdotally that emphasized phrase may be true but that's not how SOLs or contract enforcement works from a legal standpoint.

    And the rest of that paragraph has no merit at all.

    What, exactly, are you trying to determine here?

    Is there something happening to you that gives rise to the question or is this just an academic discussion based on what somebody told you that he heard from someone or some place else?

    Because, if it's the latter, then the discussion is pretty well useless.

  9. #9

    Default Re: Self Help Laws

    I guess that everything expires. Even contracts. I don't understand why it is being portrayed as if you sign a contract once that you are obligated to that contract for the rest of ones life. I know for a fact that a notarized signature is only good for 2 years in NC. Even if that notarized signature is for a contract. So if contracts become unenforceable after the statute has run then any attempts at collection would be a waist of everyone's time unless someone had and interest in settling the debt and that would only work if the original debt holder was willing to accept a settlement and if that had not been worked out before the statute had run then it is unlikely that would happen. Even if a debt had been settled the lender is under no obligation to report it on a credit report so it won't help the party that defaulted. Also unless the lawyer I discussed this with was poorly informed he stated "if signed under seal" is in your contract that extends the statute to 10 years. It is treated as a enforceable judgment. Granted I am no attorney but I have had more than my fair share of issues with my own personal credit, identity theft, being a landlord, trying to recover after a tenant defaults, trying to recover when a car loan is not paid. Yea I did it I sold a car to a friend. Almost every time I had to take the loss in full. If there was ever any tiny error on my side the party got off. So while I don't know everything in the last 20 years I have learned a few things from my own personal experiences at great expense.

  10. #10
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    Default Re: Self Help Laws

    OK, folks, I'm calling troll here.

    Says the same thing over and over and debates every response from people who know better.

    DNFTT.

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