Repossession Laws in Georgia

You likely rely on your car every day. If you aren’t able to make your car payments, you risk having your vehicle repossessed. In a car repossession, the auto lender takes your car back and sells it at auction to recoup its costs. Your lender has the right to repossess your vehicle because a car loan is a secured debt. In this debt, the car serves as collateral.

Luckily, Georgia’s vehicle repossession laws protect your rights. This piece covers Georgia’s repossession laws and how you can assert your rights as a borrower, including what you can do to get your vehicle back.

How Many Payments Can I Miss Without Risking a Repossession in Georgia? 

In the state of Georgia, if you miss one payment on your car loan, the auto lender can repossess your motor vehicle. While this is state law, your loan contract will specify if the lender allows you to miss more than one payment and how late you can be on a payment before it’s considered a missed payment. Once you’re considered late on the payment, the auto lender can repossess the vehicle. You can get your car back anytime before it’s sold. But to do this, you’ll need to pay off the loan in full, not just the payments you missed.

Will I Be Notified Before the Repossession? How?

Under Georgia state law, the auto lender can seize the borrower’s car anytime after a payment is late. They don’t need to give you notice. Once your auto vehicle is taken, the lender has to mail you a notice within 10 days explaining that your automobile has been repossessed. The notice will explain how you have to pay off the loan and repo fees if you want your car back. It will also tell you how long you have to get your car back.

How Can I Prevent a Repossession?

To prevent a repossession, make sure you know the details of the contract you signed for your loan. Under Georgia law, your auto loan contract controls when and how your car can be repossessed. Make sure to know how many (if any) payments you can miss before your vehicle can be repossessed. Also, check if the car creditor gives you a grace period. A grace period allows you to make your payment a few days late without penalty.

Regardless of where you are in the repossession process, if you can’t make your payments, you should reach out to your lender to see about getting an extension or setting up an alternative payment plan. They’re more likely to consider it if you speak with them before you’ve missed monthly payments.

Once the lender seizes your car, you can pay off your loan in full, along with associated repossession costs, to get the car back before it’s sold at auction. But Georgia code doesn’t specify how long the lender has to wait before selling the car. It’s difficult to come up with the money, but it will likely be costly to have to buy another car after the repossession is complete. Also, you’re liable for paying any unpaid portion of the loan even if the car is sold, so trying to pay it off may be your best financial bet.

What Can Repo Companies in Georgia Do? 

Once you miss a payment, the creditor can repossess your car. They can do it themselves, but usually, they hire a repo company. The repo company doesn’t need to provide any notice before seizing your vehicle, but they must abide by the following rules:

• They can’t enter your home or garage to get the vehicle without your permission. They can go on your property to get your car if it’s parked somewhere like the driveway so long as it’s not behind a locked gate.

• The repo company also isn’t allowed to breach the peace when repossessing your car. This means they aren’t allowed to use or threaten violence.

• They aren’t allowed to trick you into bringing your vehicle to a repair shop and then seize it there. For example, they aren’t allowed to issue a fake recall notice and when you show up for the repair, they seize the car. If you take your car in for a routine repair, they can seize your car while it’s at the shop.

If a repo company doesn’t follow the law, you should seek legal advice on how to take action against the repo company and lender.

Just as repo companies aren’t allowed to breach the peace, borrowers can’t either. If you physically prevent the repo company from taking your car or use the threat of violence to stop repossession, you’re breaking the law.

There’s a chance that an auto repossession could be a scam. If you haven’t missed any payments and your car is repossessed, call the lender. If you’ve missed payments and your car is repossessed, but you don’t receive notice in the mail about the repossession within 10 days of when it’s seized, reach out to your lender. Georgia law requires that you receive notice within 10 days of your car being repossessed. Although some states have rules that require a repo agent to have a license, Georgia does not, so there is not much use in asking the repo agent for their license.

What About the Personal Property in My Car? 

If you know a repossession could occur or that it’s definitely going to happen, make sure you take your personal property from the vehicle. This will prevent you from having to track down your belongings after the car is repossessed.

If the repo company has seized your car with your personal property in it, the notice you receive after your car is repossessed should tell you how to get your belongings. The repo company must give you an appointment to get your stuff. It’s also required to keep your stuff for up to 60 days. If the repo company won’t respond to you or let you come get your stuff, reach out to the lender.

What Happens After a Repossession in Georgia? 

Once your car is taken, the lender will sell it at auction. The notice you receive after your car is repossessed will tell you when the auction is, so you can try to purchase the car before then if you want to. To do this, you’ll have to pay the full balance remaining on the loan, not just the payments you’ve missed, and you’ll need to pay any repossession or lender fees.

If someone buys the car for less than the full balance on the loan, you’re responsible for the remaining balance. This is known as the deficiency balance. It’s calculated by subtracting the balance due on the loan (plus additional repo costs) from the amount the car is sold for at auction. So say you owed $11,000 on the loan, and the lender paid $1,000 in repossession costs. This means you owe $12,000. If the car is auctioned for $10,000, you’ll be left with a deficiency balance of $2,000. That’s the $12,000 you owe minus the $10,000 sale price.

Your lender is required to sell your repossessed vehicle in a commercially reasonable manner. That means they must properly advertise the auction and run it appropriately to receive all reasonable bids. If the lender doesn’t do this, you may not be responsible for the whole deficiency balance. In this case, you might only have to pay the difference between the fair market value of the car and the balance due on the loan. But if the lender advertises the auction sufficiently and there just happens to be few attendees who bid low, you’ll likely have to pay the full post-sale balance.

If you have an upside-down car loan, you’re likely to owe more on your deficiency balance. An upside-down car loan is when you owe more on the loan than the car is worth. As a result, the auto sale won’t cover much of the outstanding balance.

The lender needs to sue you and get a  deficiency judgment from a court order to collect on the balance. You can present defenses in this lawsuit. The main defense you can give is that your car wasn’t lawfully seized or was damaged due to the repo company’s action, so you shouldn’t need to pay for that damage. This is where you can also raise a claim that the lender didn’t sell your car in a commercially reasonable manner. The court that is hearing your case can direct you to the forms you need to fill out to file an answer and raise your defenses.

Do I Still Owe After a Repossession in Georgia? 

You’re likely to still owe money after the car is sold. You’ll owe what’s left on the loan after the sale. You’ll also have to pay any costs from the repo process, such as repo fees or anything else the repo company does to seize your car. You can do a voluntary repossession, which means you voluntarily surrender your car to the lender. This can help you minimize the balance you’ll have to pay, but you’ll still have to pay any deficiency balance. In a voluntary repossession, the lender doesn’t have to hire a repo company, so you won’t have to pay those additional costs.

Can I Get My Car Back After a Repossession in Georgia? 

You can buy your car anytime up until it’s sold at auction. The notice that is mailed to you after your car is repossessed will tell you what you have to pay to get your car back. Georgia law doesn’t give borrowers a set amount of time to redeem their vehicle before it’s sold at auction, so you just have until the date6 of the auction. 

Where Can I Find More Information About Repossession Laws in Georgia? 

• Georgia’s Code on Vehicle Repossession

• Georgia Legal Aid for Repossession

• Georgia Legal Aid's COVID-19 Consumer Help