Missouri Car Loan Deficiency Laws
[This article is for informational purposes only. Sewell Law does not practice in the area of vehicle repossession. We unfortunately will not be able to advise you if you contact us about a vehicle repossession, but we hope the information in this article is helpful to you.] A car loan deficiency is the difference between the amount due on a car loan and the amount for which the car is sold in a repossession sale. Missouri law requires a lender to provide three notices before suing for a car loan deficiency: a default notice, a presale notice, and a post-sale notice. Missouri Credit Union recently lost an appeal on a car loan deficiency case, because it failed to provide a post-sale notice to the borrowers.
Default Notice
First, unless the borrower has defaulted twice before on the same loan, a lender cannot legally repossess a car without first giving the borrower and co-signers a default notice at least 20 days before repossessing the car. Payment on the car loan must be at least 10 days late before a default notice may be given. The notice must include: the name, address, and phone number of the lender; a brief description of the loan; the amount in default; and the date by which that amount must be paid to cure the default. The past due amount stated in the notice can include only the missed payments plus delinquency charges.
A borrower may have a cause of action against the lender if the lender repossessed the car without first giving the default notice. In addition to actual damages, Missouri law permits the borrower to recover the borrower’s attorney’s fees if the borrower wins such lawsuit.
Presale Notice
A presale notice must have been given to the borrower and co-signers if the lender wants to sue for a car loan deficiency.
Generally, a presale notice must identify the debtor and lender, describe the vehicle, state how the vehicle will be sold, state that the debtor is entitled to an accounting, state the time and place of the sale, describe any car loan deficiency for which the borrower will be liable, provide a phone number to obtain information about how to redeem the vehicle, and provide a phone number for information about the sale and the debt owed.
Post-Sale Notice
In addition to the presale notice, before a lender can sue a borrower for a car loan deficiency, the lender must have provided a post-sale notice to the borrower and others obligated to pay the debt. Generally, a post-sale notice must state the amount of the car loan deficiency, describe how the car loan deficiency was calculated, state the future debits, credits, and charges that might be applied to the car loan deficiency, and provide a phone number or mailing address where additional information about the sale is available.
This article is for general informational purposes only, and it is not intended as legal advice. Sewell Law does not practice in the area of vehicle repossession.
The choice of a lawyer is an important decision and should not be based solely upon advertisements.
© 2019 Sewell Law, LC
Article XVI of Missouri’s Constitution authorizes using medical marijuana in Missouri. However, before qualifying patients can start using (more…)
