Repossession of a vehicle is an effective way for auto lenders to recoup losses in the event that a customer has not been able to meet their contractual payment obligations. However, when a creditor repossesses a vehicle from a borrower, it can be a tricky and uncertain process. Creditors need to be aware of their legal rights and the options available to them in these situations.
Due Process Requirements
The first step for any creditor is to familiarize themselves with the due process requirements in their state. Creditors may have certain duties they are required to fulfill before they can legally repossess a vehicle. In some states, a creditor may be required to provide written notice to the borrower, informing them of their right to cure the default. However, Illinois law does not require a creditor to notify a debtor prior to proceeding with a repossession. If necessary, creditors may still contact debtors to notify them of missed payments and inform them of the consequences of defaulting on a debt.
When repossessing a vehicle, creditors will often work with a licensed repossession agency. This agency must purchase a recovery ticket from the Illinois Commerce Commission for each vehicle that is repossessed. The recovery ticket will specify the date and time the repossession took place, the Vehicle Identification Number (VIN), the name of the repossession agency, and the name of the law enforcement official who was informed about the repossession. The recovery ticket must be kept in the vehicle until it is sold or returned to the debtor, and it must also be kept on file for two years.
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