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Q: What are your rights in New Jersey after your car has been reposessed? ( Answered,   2 Comments )
Subject: What are your rights in New Jersey after your car has been reposessed?
Category: Relationships and Society > Law
Asked by: finkdawg5-ga
List Price: $20.00
Posted: 28 Mar 2005 08:31 PST
Expires: 27 Apr 2005 09:31 PDT
Question ID: 501394
Hi all, I was wondering if anyone knew where I could find out what
NJ's laws are regarding vehicle reposession. I tried searching statues
through and through the lexus nexus database with not
one hit thorough either. Googling for it has turned out to be a
nightmare as well. Specifically, I recently had a car reposessed.
However, the company sent me a certified letter with the wrong date & place
where the vehicle was going to be auctioned, never told me the correct
date & place, and they never notified me how much the vehicle
eventually sold for. Now I am getting a collection notice in the mail
for a few thousand dollars. People keep telling me that the bank was
required to notify me of the date, time, and place where the car
auction was to be held so that I could participate in the bidding, and
that they should have sent me something stating how much the vehicle
was sold for. I want to send them a letter and hopefully find some
kind of a loophole that will buy me time to pay the money, but I want
to get all my facts straight first. Any help you could
provide would be appreciated. Thanks!

Clarification of Question by finkdawg5-ga on 26 Apr 2005 11:00 PDT
In the original contract from when I bought the vehicle, there is a
section that says...
"REPOSESSION OF GOODS. The right to obtain posession of the Goods,
with or without process of law, if you do not deliver them to us. You
authorize us to peaceably enter any premises where the Goods may be in
order to take posession of the Goods and remove them. You authroize us
to use your license plates in removing the Goods to a place of
storage. We may take any other things founds in the Goods, but will
return these things to you if you ask. If you want these things back,
you agree to ask us in a letter sent to us by certified mail within a
reasonable time."
"SALE OF THE GOODS. The right, as provided by law, (a) to sell the
Goods at a public or private sale, or (b) to propose to keep the Goods
in full satisfaction of your obligations under this Contract. In the
event of sale, we will give you at least 10 days reasonable notice of
the time and, if a public sale, also the place of the sale.  We will
apply the sale proceeds first to our costs. The balance of the
proceeds will then be applied to Late Charges, and then to the balance
due us. If there is a surplus, we will pay it to you. If there is
still an amount due us, you must immediately pay it to us, with
interest which, if permitted by law, will continue to be imposed at
the rate provided in this Contract until we are paid in full."

Doesn't this change some things? They didn't provide proper notice of
the sale. Should I contact a lawyer or is this a lost cause?
Subject: Re: What are your rights in New Jersey after your car has been reposessed?
Answered By: markj-ga on 26 Apr 2005 14:36 PDT
finkdawg5 --

I can answer your original question as to the New Jersey statute that
governs notice of repossession sales.  This should give you a
grounding in the relevant law that will make a conversation with a
local lawyer more efficient and useful.

Beyond that, we are not authorized to give you legal advice and, as
you apparently recognize, good advice could only come from a New
Jersey lawyer who is familiar with the New Jersey case law and could
evaluate all of the facts of your case in light of that law.

Anyway, back to your original question, the New Jersey statutes
governing notice in automobile repossession case are Sections
12A:9-610, 611 and 612.  Here is the text of those sections:

12A:9-610.  Disposition of Collateral after Default.

(a)Disposition after default.  After default, a secured party may
sell, lease, license, or otherwise dispose of any or all of the
collateral in its present condition or following any commercially
reasonable preparation or processing.

(b)Commercially reasonable disposition.  Every aspect of a disposition
of collateral, including the method, manner, time, place, and other
terms, must be commercially reasonable.  If commercially reasonable, a
secured party may dispose of collateral by public or private
proceedings, by one or more contracts, as a unit or in parcels, and at
any time and place and on any terms.

(c)Purchase by secured party.  A secured party may purchase collateral:

(1) at a public disposition; or

(2)at a private disposition only if the collateral is of a kind that
is customarily sold on a recognized market or the subject of widely
distributed standard price quotations.

(d)Warranties on disposition.  A contract for sale, lease, license, or
other disposition includes the warranties relating to title,
possession, quiet enjoyment, and the like which by operation of law
accompany a voluntary disposition of property of the kind subject to
the contract.

(e)Disclaimer of warranties.  A secured party may disclaim or modify
warranties under subsection (d):

(1)in a manner that would be effective to disclaim or modify the
warranties in a voluntary disposition of property of the kind subject
to the contract of disposition; or

(2)by communicating to the purchaser a record evidencing the contract
for disposition and including an express disclaimer or modification of
the warranties.

(f) Record sufficient to disclaim warranties.  A record is sufficient
to disclaim warranties under subsection (e) if it indicates "There is
no warranty relating to title, possession, quiet enjoyment, or the
like in this disposition" or uses words of similar import.

Amended 2001, c.386, s.99.

12A:9-611.  Notification Before Disposition of Collateral.

(a)"Notification date."  In this section, "notification date" means
the earlier of the date on which:

(1)a secured party sends to the debtor and any secondary obligor an
authenticated notification of disposition; or

(2)the debtor and any secondary obligor waive the right to notification.

(b)Notification of disposition required.  Except as otherwise provided
in subsection (d), a secured party that disposes of collateral under
12A:9-610 shall send to the persons specified in subsection (c) a
reasonable authenticated notification of disposition.

(c)Persons to be notified.  To comply with subsection (b), the secured
party shall send an authenticated notification of disposition to:

(1)the debtor;

(2)any secondary obligor; and

(3)if the collateral is other than consumer goods:

(A)any other person from which the secured party has received, before
the notification date, an authenticated notification of a claim of an
interest in the collateral;

(B)any other secured party or lienholder that, 10 days before the
notification date, held a security interest in or other lien on the
collateral perfected by the filing of a financing statement that:

(i)identified the collateral;

(ii)was indexed under the debtor's name as of that date; and

(iii)  was filed in the office in which to file a financing statement
against the debtor covering the collateral as of that date; and

(C)any other secured party that, 10 days before the notification date,
held a security interest in the collateral perfected by compliance
with a statute, regulation, or treaty described in 12A:9-311 (a).

(d)Subsection (b) inapplicable:  perishable collateral; recognized
market.  Subsection (b) does not apply if the collateral is perishable
or threatens to decline speedily in value or is of a type customarily
sold on a recognized market.

(e)Compliance with subsection (c) (3) (B).  A secured party complies
with the requirement for notification prescribed by subsection (c) (3)
(B) if:

(1)not later than 20 days or earlier than 30 days before the
notification date, the secured party requests, in a commercially
reasonable manner, information concerning financing statements indexed
under the debtor's name in the office indicated in  subsection (c) (3)
(B); and

(2)before the notification date, the secured party:

(A)did not receive a response to the request for information; or

(B)received a response to the request for information and sent an
authenticated notification of disposition to each secured party or
other lienholder named in that response whose financing statement
covered the collateral.

Amended 2001, c.386, s.100.

12A:9-612.  Timeliness of Notification Before Disposition of Collateral.

(a)Reasonable time is question of fact.  Except as otherwise provided
in subsection (b), whether a notification is sent within a reasonable
time is a question of fact.

(b)10-day period sufficient in non-consumer transaction.  In a
transaction other than a consumer transaction, a notification of
disposition sent after default and 10 days or more before the earliest
time of disposition set forth in the notification is sent within a
reasonable time before the disposition.

Amended 2001, c.386, s.101.

New Jersey Permanent Statutes Database{3E1E}&softpage=Doc_Frame_PG42

If you have trouble with that long address, here's how you can get to
these and other sections relating to defaults on secured autmomobile
and other commercial loans.  Proceed carefully, because the process is
not intuitive and took me a while to figure out.

Start at the site of the New Jersey Legislature:

New Jersey Legislature

Click on the "Statutes" link near the bottom of the left side of the page.

In the list of "Titles" that appears, click on the "* sign" to the
left of "12A Commercial Transactions."

Then scroll to the bottom of the page and advance the table of
contents by repeatedly clicking on the arrow on the right side of the
page.  Eventually will get get to Chapter 12A:9, which is titled
"Uniform Commercial Code - Secured Transactions."

Search Strategy:

I found this source for the text of the New Jersey Statutes with the
following Google search:

repossession automobile "new jersey" notified

After some false starts because of the non-intuitive search tools for
the New Jersey Statutes, I found the relevant sections using the
process I described above.

As I noted at the outset, I believe that a review of the sections I
have provided you will give you what you need to have a brief but
constructive discussion with a knowledgeable local lawyer.

I hope that this answer is still timely, but I became aware of your
question only a couple of hours ago.

If anything is unclear, please ask for clarification before rating the
answer, and good luck.

Subject: Re: What are your rights in New Jersey after your car has been reposessed?
From: clint34-ga on 29 Mar 2005 05:27 PST
I think if you will pull your original contract, you will see that if
your vehicle is repossessed the bank or lender has the right to
recover the funds between price it sold, and amount you own. It is
called self confessed judgment, read your contract.

And pay your note, good credit will help you, bad credit can keep you
from some jobs.

Subject: Re: What are your rights in New Jersey after your car has been reposessed?
From: myoarin-ga on 29 Mar 2005 08:28 PST
Right, clint34-ga, but if the car is sold for more than what is owed
the bank and expenses, the balance should go to the questioner, hence
his right to be present at the sale, if only to assure himself that he
isn't being done in by the bank's claiming a lesser amount was paid.
This makes me believe that the bank should provide some evidence of
the sale and the price, not just its own statement thereof.

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