Yes. Unlike most conventional businesses, the towing industry plays a significant role in city regulation and maintenance, mostly in helping implement parking and automotive laws. Therefore, it is typical for cities to pass laws controlling and managing the use of tow trucks.
Government Regulation of Vehicle Towing Industry Lawyers
- What Types of City Regulations Exist for Vehicle Towing?
- DUI and Other Vehicle-Involved Crimes
- Car Repossession Laws: An Outline
- Why Is the Lender Authorized to Repossess Your Car?
- How Do Vehicle Repossessions Function?
- What Will the Lender Do After Repossessing Your Car?
- What Is a Deficiency Balance?
- How Can You Get Your Vehicle Back?
- How Can You Bypass Getting Your Car Repossessed?
- How Can a Lawyer Help Me?
What Types of City Regulations Exist for Vehicle Towing?
Though vehicle towing laws differ from city to city, some potential forms of regulation include:
- Towing licenses
- Franchise zoning (i.e., deciding what area a towing business can service)
- Towing category (i.e., making specific requirements for particular types of towing)
- Lists of towing services available to drivers who are stopped by police
- Limiting transfers of towing licenses when a tow truck is sold
- Requiring additional qualifications beyond a towing license
- Banning unrestricted solicitation of towing services on city streets
- Demanding authorization for towing a vehicle beyond city limits
- Limitations on hours of operation in certain areas
- Maximum fees chargeable for towing
DUI and Other Vehicle-Involved Crimes
If a driver is charged with drunk driving or driving under specific types of suspension, and when vehicles are used to commit serious crimes, especially drug crimes, the car can be relinquished to the state by a court order. In most instances, however, the police cannot hold the vehicle if a properly authorized and licensed driver comes to the lot and asks that it be released.
Car Repossession Laws: An Outline
Continue reading to learn about car repossessions: how they operate, how to avoid them, and your options if it happens to your vehicle.
State Restrictions on Debt Collection Practices, Collection Lawsuits, Post-Judgment Remedies, and Repossessions Due to the Coronavirus Crisis
Some states have temporarily restricted creditors and debt collectors from taking specific debt collection actions, like filing (or proceeding with) a collection lawsuit, garnishing earnings, seizing property, repossessing a vehicle, or freezing a bank account, due to the coronavirus (COVID-19) crisis.
To find out if your state has any limitations on debt collection practices during this national emergency, check your state’s official website and look for orders related to the pandemic. The National Consumer Law Center (NCLC) website is also a valuable source of information on consumer matters, including debt collection limitations during the coronavirus outbreak.
If you fail to make your car payments or otherwise default on your loan, you risk having your car repossessed by your lender. Read on to understand more about how car repossessions work, how to avoid them, and your options if your car gets repossessed.
Why Is the Lender Authorized to Repossess Your Car?
When you finance or lease a car, you usually give the lender a security interest in the vehicle. Every state has its own regulations regarding repossession, but having a security interest typically means your lender can repossess the car without warning if you default on the loan. Many things can comprise a default, but the most typical reasons are not making timely loan payments or not having car insurance.
How Do Vehicle Repossessions Function?
In most states, car lenders can seize your vehicle without earlier notification if you’re in default. Yet, they can’t breach the peace while they do it. Breaching the peace usually means threatening to use physical force to take the vehicle back. But it can also merely involve repossessing the vehicle from your closed garage. If your lender commits a breach of the peace, you might be entitled to damages in a deficiency lawsuit.
What Will the Lender Do After Repossessing Your Car?
The lender can keep the car or sell it to meet your loan obligation. Each state has its own regulations regarding sale procedures and notices requirements. Nevertheless, you usually have a right to know when and where the sale will occur. Also, your lender must sell the car in a commercially reasonable manner.
This means the lender has to observe standard sales practices, but obtaining the highest possible price is not required. You might have a claim for damages or a defense against a deficiency if the sale wasn’t commercially reasonable.
What Is a Deficiency Balance?
Repossession is only one of the remedies available to your lender if you default on your loan. Having your vehicle repossessed doesn’t get you off the hook for your responsibility to pay the entire balance of the loan. If the earnings from the car sale aren’t enough to cover the balance of your loan, the remaining amount is called the deficiency balance. In most states, your lender can sue you to amass this deficiency.
However, as discussed above, there are defenses to a deficiency action.
The most standard defenses are:
- The lender breached the peace when repossessing the car
- The lender did not sell the car in a commercially reasonable manner
- The lender lost the privilege to sue by waiting too long and letting the “statute of limitations” run.
How Can You Get Your Vehicle Back?
You might still be able to get your vehicle back if the lender has not sold it yet. Below, we will discuss some of the options available to you for getting your vehicle back.
Redeeming the Car
Redeeming means buying back the vehicle. You can typically redeem your car if you pay the lender your entire loan balance, including repossession costs. But most individuals usually don’t have the money required to redeem a vehicle.
Reinstating the Loan
Some states permit you to reinstate your loan and get the car back if you can cure all of your arrears and pay for the repossession expenses. After you reinstate, you must continue to make regular payments on the loan. There is a difference between redeeming the car and reinstating the loan.
Buying the Car Back at an Auction
If your lender sells the vehicle at an auction, you can bid on the car to try to repurchase it. But even if you buy back the car, you’ll remain responsible for any resulting deficiency balance.
Filing for Bankruptcy
If you file for bankruptcy before the sale, the automatic stay will forbid the lender from selling the car without getting court permission. Depending on the type of bankruptcy you file, this can buy you more time to collect the required money to get your vehicle back or allow you to cure your arrears through bankruptcy.
How Can You Bypass Getting Your Car Repossessed?
If you’re behind on your loan payments, the soundest thing to do is to speak with your lender. Your lender might be able to deliver you a solution such as a reduction in payment amount or interest rate that can help you catch up on your payments and avoid repossession.
How Can a Lawyer Help Me?
Suppose you are looking to start or purchase your own towing service. In that case, an experienced business attorney can help you learn more about local vehicle towing laws, including which laws are applicable in your area. A lawyer can also assist you with all the legal procedures necessary to start a legitimate business.
Use LegalMatch to find a knowledgeable business attorney in your area today. There is no fee to schedule an initial consultation. Take the first step toward resolving your legal matter by hiring an attorney.
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