• Consumer Protection Law and Advocacy — Chicago, IL


Wrongful Repossessions - Bardo Law PC

Illinois Law Governing Repossession Agents

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Illinois law requires that repossession agents be licensed and have insurance.  It also requires that agents keep track of all repossessions with recovery tickets purchased through the Illinois Commerce Commission.  As the entity charged with regulating repossession agents, the Commerce Commission’s website has helpful information for you to check out if your vehicle is repossessed — https://www.icc.illinois.gov/CollateralRecovery/.

Through the website, you can examine current license information and learn your rights post-repossession.  For example, repossession agents must inventory any personal property left in a vehicle during a repossession and tell you how to get your property back.  Agents must also notify local police before a repossession occurs and provide the agency’s name, license number, and the color, make, model, VIN, and description of the collateral being repossessed.  Within 30 minutes of the repossession occurring, the agency must then inform police of the date and time of the repossession.

If your car has been repossessed, contact your local police department to see whether the repossession has been properly reported.  If you don’t receive a notice from your finance company within 3-5 days of the repossession, make sure you call to find out where your vehicle is and the identity of the repossession agency to minimize possible storage fees.  But watch out – repossession agents may force you to sign documents when picking up your belongings or your vehicle so be sure you don’t unknowingly release any claims you may have for damages or unfair conduct.  You have the right to refuse signing a release and consult a lawyer for assistance.


Wrongful Repossessions - Bardo Law PC

What Happens After Your Car Is Repossessed?

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There is a lot of misinformation about car repossessions.  Many consumers believe if they voluntarily turn over their vehicles when they are having trouble making their payments, they won’t have to pay off the balance on their car loans.  Consumers need to understand that returning a car “voluntarily” will likely still be reported as a “repossession” to the credit reporting bureaus.  The finance company will sell the car after you turn it in and hold you liable for the difference between the sale price and the amount of the contract.  This is especially important to consider if you have a high interest rate loan on a used car.  If the used car doesn’t fetch a good price at sale, the outstanding unpaid balance could be quite large, and you could end up being sued in court to pay the difference.

So what can you do?  First, pay close attention to your mail.  The finance company is required to send you important paperwork regarding any post-repossession sale and your rights to reinstate the contract.  If you don’t get this paperwork, you may have a good defense to a potential lawsuit down the road.  If you do receive it, make sure you verify that the sale price was reasonable by checking out Kelley Blue Book values at http://www.kbb.com/.  Also, be sure you aren’t being charged inflated storage or repossession costs (especially if you turned the car in yourself).

Consider looking for your own buyer as well.  If you can find someone willing to pay a fair price, it may reduce or eliminate the balance on your loan account.

Finally, keep in mind that if you turn over your car to a repossession agent, make sure to get that agent’s contact information and business card.  In Illinois, repossessions must be reported to the Illinois Commerce Commission and all agents must be properly licensed.  See https://www.icc.illinois.gov/collateralrecovery/ for a copy of the applicable regulations.

Repossessions don’t have to be a nightmare – but don’t be caught unaware of their consequences.