Having your car repossessed is stressful under any circumstance — but it’s even worse when the repossession was wrongful. Whether the lender made a mistake, violated your rights, or took your vehicle after you made arrangements to pay, you may be entitled to compensation and to have the repossession removed from your credit report.
Here’s what you need to know about wrongful repossessions, your rights under federal and state law, and what steps to take right away to protect yourself.
What Counts as a “Wrongful” Repossession?
Lenders and auto finance companies have the right to repossess a vehicle if you default on your loan — but they must follow specific legal procedures. A repossession may be wrongful if the lender or its agents:
Took your car even though your loan payments were current or in a payment arrangement.
Entered private property illegally or breached the peace during repossession.
Repossessed without proper notice or after you filed for bankruptcy protection.
Misapplied your payments or failed to credit them properly before claiming default.
Took the wrong vehicle or confused your account with someone else’s.
Continued collection or repossession efforts after you disputed the debt.
Under both state consumer protection laws and the Uniform Commercial Code (UCC), repossessions must be conducted peacefully and in strict compliance with the contract and the law.
1. Verify the Details Immediately
If your vehicle was taken, the first step is to confirm who repossessed it and why.
Contact your lender or financing company and ask for written documentation showing the reason for the repossession.
Request a payment history and copies of all notices they claim were sent to you.
Do not assume you were at fault — clerical errors and misapplied payments are common causes of wrongful repossession.
Keep a written record of all communication, including names, dates, and call summaries.
2. Check for Violations of the “Peace”
Even if a repossession was technically allowed, it may still have been conducted illegally if the repossession company:
Threatened, used force, or caused property damage.
Broke into a locked garage or gated area.
Misrepresented themselves as law enforcement.
Repossession agents cannot “breach the peace” under any circumstances. If they did, the entire repossession may be unlawful — and you may be entitled to damages.
3. Know Your Rights Under the Law
You have several important rights when your car is repossessed, including:
The right to receive notice of sale or disposition of the vehicle.
The right to redeem or reinstate the loan before it’s sold, depending on your state.
The right to demand an accounting of the debt and the proceeds from the sale.
The right to dispute an inaccurate or illegal repossession on your credit report.
If these rights were violated — or if your lender reported the repossession inaccurately — you may be able to bring a claim under the Fair Credit Reporting Act (FCRA) or other consumer protection laws.
4. Document Everything
Write down every detail while it’s still fresh:
The date, time, and location of the repossession.
Any witnesses present.
Any damage to your property or vehicle.
The names of the tow company or repossession agents (often listed on the tow notice).
Take photos or videos if possible. This documentation can be critical if you need to file a complaint or lawsuit later.
5. Get Your Belongings Back
Even if the lender had the right to repossess the vehicle, your personal property inside the car is still yours.
Contact the repossession company immediately to arrange pickup.
Make an inventory of items recovered and any missing property.
If the company refuses to release your belongings or demands payment first, that may be illegal.
6. Dispute Any Wrongful Credit Reporting
If the lender or repossession company reported the repossession to the credit bureaus, you have the right to dispute it if it was wrongful or inaccurate.
Send written disputes to Equifax, Experian, and TransUnion, explaining that the repossession was improper and include copies of proof — payment records, correspondence, or court filings.
Under the Fair Credit Reporting Act, the credit bureaus must investigate and remove inaccurate or unverifiable information within 30 days.
7. File a Complaint or Seek Legal Help
If your lender refuses to correct the issue or continues to report inaccurate information, you can file complaints with:
The Consumer Financial Protection Bureau (CFPB)
Your state attorney general’s office
The Federal Trade Commission (FTC)
You also have the right to sue for damages if the repossession violated your rights or caused harm to your credit or finances.
Bottom Line
A wrongful repossession can leave lasting damage — from losing your transportation to seeing your credit score drop hundreds of points. But you don’t have to face it alone.
If your vehicle was repossessed unfairly, reported inaccurately, or taken in violation of your rights, contact The Credit Attorney. Our team can review your loan records, dispute wrongful reporting, and pursue legal action to hold lenders and repossession agents accountable.
