Repossession Laws in Kansas

Most lenders can repossess a motor vehicle when a borrower stops making payments on their car loan. This is a standard part of many car loan agreements, which are secured loans. The loan is secured by the car, which means the lender can take the car back and sell it to recoup their losses if the borrower doesn’t make their payments. You have rights as a borrower, and there are rules dictating how your creditor must handle the car repossession. This article covers what to keep in mind if you’re facing repossession in Kansas.

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

Kansas statutes provide more consumer protections against repossession than most other states. In many states, if you haven’t made your car loan payment on or by the due date, you immediately go into default. But in Kansas, you aren't considered in default on your car loan until 10 days after a missed payment. Unlike other states, repossession in Kansas can’t be triggered by your failure to fulfill other terms in the agreement like maintaining insurance.  

Will I Be Notified Before the Repossession? How?

Once the 10 days have passed, you should receive a right to cure letter explaining that you have an additional 20 days to pay what you owe before your lender has the right to repossess your car. This written notice is really important. It has to meet Kansas repossession law requirements by including:

• Contact information for your creditor, 

• Information on the loan,

• Information on your right to make up (or "cure") the missed payment,

• How much and when you need to pay, and 

• Your liability for the costs. 

If the lender doesn’t give you the receive proper notice, you may have a legal claim against them or be able to sue for damages. You’re only guaranteed one right to cure like this for the whole life of the loan so make it count. If you default again, the lender isn’t legally required to send another right to cure notice.

Once the 30-day time period (10 days past due + 20 days to cure) passes, if you haven’t paid the amount due, your car could be repossessed at any time. 

How Can I Prevent a Repossession?

If you’re struggling financially, you might not have the funds to make up the missed payment before your right to cure period ends. In that case, contact your lender or creditor as soon as you know you might have a late payment. 

It might feel awkward or nerve-wracking to make the call. But think of it like this: Repossessing your car is a hassle for your lender, too. It’s in their interest as well as yours to avoid it. When you call your lender, be honest about your financial situation and emphasize your desire to honor your borrower obligation in any way you can. Ask if the lender offers any hardship programs or has options like a new payment plan or temporary forbearance to help you.

What Can Repo Companies in Kansas Do? 

Once the right to cure period has passed, repo agents can take your car without a court order if they do so without breaching the peace or entering your dwelling. Breaching the peace involves using threats, tricks, or violence. Your dwelling is your home and includes your garage and any area behind a locked gate. Any place beyond those areas is fair game to the repossession agents. 

You don’t need a license to operate a repossession company in Kansas. But repo companies do need to have operating authority from the Transportation Division of the Kansas Corporation Commission. The Transportation Division will only grant this operating authority after the repo company has had safety training and met other standards. 

This training is more about general road safety and isn’t specific to repossession, but the Transportation Division is within its rights to take action against banks, credit unions, and other financial institutions that hire repo companies running tow trucks that are operating without this authority. It can and will shut them down until they obtain the proper clearance. As a borrower, you can take note of the repo agency's information and check it online to ensure the company is operating legally. If they aren’t, you’re within your rights to report them and your lender for hiring them. 

Keep in mind that you have to refrain from breaching the peace as well. It's horrible to watch someone take the car that you rely on, but you have to stay calm and refrain from threats, tricks, or violence. If you don’t, you could end up getting hurt or arrested. You could also hurt your wallet. Not only will extra repo charges end up on your bill, but Kansas law also allows creditors to claim damages if a borrower damages the car, or, after default/demand, doesn’t make the car available. You can avoid the repossession altogether by doing a voluntary repossession.

What About the Personal Property in My Car? 

Remove all your personal property from the car as soon you know you might be at risk for repossession. This includes any modifications you may have made like the speaker system or upgraded rims. If you do remove any modifications be sure to reinstall the default equipment to avoid any accusations of damaging the car. Getting your property back will be an added hassle you don't need to deal with on top of the stress of losing your car. 

If your car has already been repossessed, the repo agency should notify you that they have removed the items and stored them at your expense. They should also give you information on how you can retrieve your property. This applies to loose property only and doesn’t include any fixtures. For example, if the car is repossessed with your upgraded rims they will be considered part of the car. If you don’t hear from the repo agent, contact your lender immediately and let them know what items you are missing.

What Happens After a Repossession in Kansas? 

The lender's options after repossessing your car vary based on how much you’ve paid on the loan. 

• If you’ve paid less than 60% of the principal on your loan, the lender/lienholder may keep the car to satisfy the loan agreement after you default. They can only do this if they notify you, and you don’t object to them doing so. 

• The lender has to sell the car if you’ve paid 60% or more of the cash price or loan principal and haven’t signed a statement after default that renounces your rights in the car.  

The foreclosure sale can be public or private. The lender must give you written notice that includes the time and place of a public sale. You should also receive reasonable notice of the time of a private sale.

Do I Still Owe After a Repossession in Kansas? 

The auction proceeds will first be applied to repossession expenses and sale expenses. Any remainder will go toward your car loan balance. If there's money left over after that, it belongs to you. If there’s still an outstanding balance on your loan after repo and sale expenses have been paid, you’ll have a deficiency balance.

The state of Kansas will let you off the hook for the deficiency balance if:

• The creditor didn’t sell your car in good faith and a commercially reasonable manner. This means the creditor didn’t sell the car for a fair price or in a fair way. To prove that the creditor’s efforts weren’t commercially reasonable, you’ll have to show they did something out of the ordinary or got an unusually low price for the market at that time. 

and/or

• The auction price was $1,000 or less. This could end up working out in your favor if you were upside-down on your car loan and your car value was low.

You should receive an itemized list of the expenses related to the repossession and sale of your car. Double-check this list, and ask for receipts. Lenders sometimes make mistakes, and if they do, it will be on your dime. It's rubbing salt in the wound that they take your car and charge you for it, but take some comfort in the fact that Kansas law places limits on these charges. Your bill must meet the following requirements: 

• It can’t include charges made by a salary-earning employee of your lender OR your lender's assignee (a company that bought your loan from your lender).

• It can only charge you for attorney fees OR debt collection agency fees — not both!

• The costs of collection (which can include but aren’t limited to court costs, attorney’s fees, and collection agency fees) can’t be more than 15% of the unpaid debt after default.

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

Once your motor vehicle has been repossessed you should receive a written notice with details on how to redeem your car (get it back) before it’s sold. This likely will include paying back all past-due payments plus the creditor's expenses. 

If your creditor fails to dispose of your repossessed vehicle within 90 days of the repossession, you have a chance to recover the car under Kansas law.

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

• Did you receive a proper right to cure notice? Compare it to the sample from the Kansas State Legislature.

• If you need legal advice or help to address a repossession, you can contact Kansas Legal Services or the Kansas Bar Association.

• The Kansas Attorney General’s Consumer Corner: Know your rights regarding monthly payments has helpful information for Kansans facing repossession.

COVID-19 Hardship Information 

• Some auto lenders are offering auto loan relief for individuals experiencing financial hardship due to COVID-19, but you have to contact them.