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Do you know someone struggling to make car payments? Or someone who has had his or her car repossessed? Wisconsin law mandates specific notice requirements that lenders must follow before they can repossess your car, and provides consumers with substantial remedies if they fall victim to an illegal repossession.

Wisconsinites who suffer unlawful repossessions may be entitled to:

    • keep the vehicle without any obligation to make further payments under the loan
    • recover all prior payments already made under the loan, including any down payment
    • recover compensatory damages, i.e. money spent as a result of losing access to your car
    • recover punitive damages for egregiously unlawful conduct
    • recover attorneys’ fees and costs

Before providing some examples of how creditors sometimes conduct unlawful vehicle repossessions in Wisconsin, let’s review essential consumer rights surrounding car repossessions.

Car Repossession Requirements of Wisconsin Law

  1. Your loan must be in default. Legal repossession requires that the car loan is in “default,” which usually means you owe more than one full payment for more than 10 days.
  2. Creditors must provide a notice of your right to cure the default. Before a lawful repossession can occur, creditors must provide you with written notice of the alleged default and notice of your right to cure the default. While a creditor can inform you via email that it believes your loan is in default, the required notice of your right to cure the default must be sent by regular postal mail. This notice has to contain specific statutorily required information, which out-of-state lenders often fail to include.
  3. Creditors must wait 15 days to repossess your car. Creditors must give you a chance to cure the default after sending the above postal notice. After sending the notice of your right to cure the default, by mail, creditors must wait 15 days before they can lawfully repossess your car. In other words, if the creditor’s notice is placed in the mail on January 1st, the creditor could not repossess your vehicle until January 16th. If a creditor has met the above requirements, it can then either file a lawsuit against you or engage in “self-help” repossession without the involvement of the court. “Self-help” repossession is where the party having right of ownership takes the property in question back from the party in possession, without involving the court. Creditors usually choose “self-help” repossession because it is easier, faster, and cheaper.
  4. Creditors cannot breach the peace. Even if they have followed all the rules and may lawfully repossess your vehicle, creditors cannot carry out the repossession if you verbally object as repossession is taking place or otherwise resist the repossession. *Do not use violence, as it is unnecessary and will hurt your situation.* Objecting is as simple as telling the repo person to “stop” or “get away” from your car. Creditors try to avoid such objections by repossessing vehicles during the early-morning hours, when people are asleep. If creditors repo your car over verbal objections, they are “breaching the peace” and the repossession is unlawful. The presence of police during a “self-help” repossession does not make an otherwise unlawful repossession legal. Repossessions – via “self-help” or judicial methods – are a civil matter, not a criminal matter, and police should not be involved; unfortunately, their involvement is not uncommon. Police cannot arrest you for objecting to an otherwise lawful repossession (unless you break the law), and they cannot search your car or residence without a warrant. A repossession conducted over a verbal objection breaches the peace; if police were present, you simply have more witnesses to the illegal repossession.
  5. Creditors cannot invade your privacy. Creditors cannot enter your home or garage to repossess your vehicle unless the consumer requests that they enter. Creditors also cannot open an unlocked gate to access the vehicle, and they cannot break into anything that is locked.
  6. If your car has been repossessed, you have the right to get it back. Following a repossession, you have 15 days to redeem the repossessed vehicle. During this period, the creditor cannot sell or agree to sell the vehicle. How to redeem your vehicle depends on the specific situation and is described in Wis. Stat. § 425.208, but it generally involves getting caught up on your loan, paying a “performance deposit” equal to three (3) scheduled installments, and paying some fees.
  7. Creditors must sell repossessed cars in good faith and a commercially reasonable manner. If your lender has already repossessed and sold your car, it can sue you for the deficient balance on your loan. However, it cannot sell a car for an unreasonably low price, then turn around and say you owe more as a result. Your bank or loan company must prove it sold your vehicle in a commercially reasonable manner in order to obtain a deficiency judgment.

Illegal Car Repossession Scenarios

By way of example, let’s look at a few hypothetical repossession scenarios.

Example One: Illegal Entry

Consumer keeps his van in his garage, which is behind a chain-link fence. Neither the garage nor fence are locked. While consumer is away from home, repo personnel open the latch on the unlocked gate, enter consumer’s garage through an unlocked exterior door, press a button to open the garage door, hoist the van onto the bed of a truck, and drive off with the van, politely closing the gate behind them. Outcome: Repossession was unlawful because the repo personnel entered the consumer’s residence in two impermissible ways: 1) opening the unlocked gate, and 2) entering the unlocked garage. Either one, alone, is a violation.

Example Two: Failure to Give Appropriate Notice

Consumer falls behind on payments and lender sends consumer an email noticing loan is in default and consumer has 15 days to cure the default, but nowhere states that lender may have a right to repossess vehicle. Consumer does not make a payment and lender repossesses the car a month later. Outcome: Repossession was unlawful because 1) the notice of right to cure was not sent by mail and 2) the notice of right to cure did not explicitly state that the lender may have a right to repossess the car as a result of consumer’s default, as required by Wis. Stat. § 425.205(1g)(a)(2).

Example Three: Failure to Wait Required Time Period after Notice

Consumer falls behind and lender sends email saying that loan is in default. Consumer does not make car payments for a year. Lender sends notice of right to cure default by certified mail and repossesses the car a week later. Outcome: Repossession was unlawful because, even though the consumer did not make payments for a whole year, the lender did not wait 15 days after sending the notice of right to cure.

Example Four: Breach of Peace

Consumer has not made payments in months and lender sent notice of right to cure via certified mail a month ago. Consumer’s daughter wakes up at 4:30 AM because she hears noises outside her window. She steps outside and sees repo personnel already have her car up on the bed of the truck and are about to drive away. She strained her voice at a concert the night before and cannot speak, so she stands in front of the repo truck and crosses her arms. Her mother then wakes up, comes outside, and calmly states to the repo staff, “You aren’t going to take my car, I need it to get to work.” Repo staff ignore her and drive around the daughter, repossessing the car. Outcome: Repossession was an unlawful breach of the peace for two reasons: The consumer and her daughter each clearly made known their objections to the repossession by 1) stating the objection, and 2) standing in front of the truck.

Don’t Be Ashamed if You’ve Hit Difficult Times

Having a vehicle is often critical to making an income and living a full life. Wisconsin law recognizes this and provides important protections so that no Wisconsinite will lose his or her vehicle without due process.

Call us at 608-257-0040 today for a free consultation if you believe your lender may be violating the law. After our intake team gets your basic information, we’ll schedule a phone call or meeting during which one of our consumer protection attorneys will listen to your story and help you determine if you have a strong legal case.

Mike Godbe

Associate at Hawks Quindel
Attorney Michael Godbe fights for individuals to be treated fairly in the workplace and in the marketplace. He is an Associate Attorney at Hawks Quindel and splits his practice between employment law and consumer protection. His employment law practice centers on employment discrimination and employee rights under the Family Medical Leave Act, and his consumer protection practice covers a range from debt collection harassment and unlawful “robocalls” to auto sale fraud and unlawful repossessions. Attorney Godbe has represented individuals in Federal and State court, as well as in small claims court.