Car Repossession Laws in Maryland

by Charm Baker
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Motor vehicles top the list of consumer goods that are commonly repossessed. According to the Maryland Department of Labor, Licensing and Regulations, “A creditor may repossess your vehicle if loan payments become delinquent, even after one missed payment.” The state of Maryland provides a free "Buyers Beware" pamphlet. Consumers learn about the five forms of notification in the car repossession process. These things occur before the creditor can sell the borrower’s automobile.

The “Notice to Buyers”

Repossession laws in the state of Maryland require providing a "Notice to Buyers" stating their rights. Primary rights revolve around borrowers being provided with a copy of the sales contract. They must also have the right to pay the full amount of the loan in advance. Additionally, the borrower has the right to redeem the vehicle. The vehicle can be redeemed only if the borrower pays for reasonable expenses that creditors incur for repossession. This is in addition to paying the total amount actually owed on the vehicle.

The “Discretionary Notice”

A Discretionary Notice is a form stating the delinquent amount and the intent to repossess the vehicle. It provides the repossession date, as well as the estimated costs for towing and storing the automobile. If a creditor decides to issue the borrower a Discretionary Notice, it must be done 10 days prior to repossessing the vehicle. Issuance of a "Discretionary Notice" is not mandatory in Maryland. Issuing this Notice, however, can be advantageous to the creditor. Failing to issue the Discretionary Notice prevents the creditor from recovering the reasonable fees they incurred as a result of repossessing the automobile.

The “Required Notice”

After a vehicle has been repossessed, the creditor must issue the borrower what is known as a “Required Notice.” Included on the notice is another reminder about the borrower's right to redeem, as well as details pertaining to the location and resale of the automobile. This notice must be sent by certified mail.

The creditor has to retain the vehicle and not attempt to resale it for 15 days following the issuance of the Required Notice. The borrower can pay the necessary fees and take steps to redeem the vehicle during this time.

Final Notification to Borrower

If the borrower hasn’t acted thus far, there is still one final opportunity to redeem the vehicle. The creditor has to notify the borrower ten days prior to the actual sale of the automobile. This notification must also be done by certified mail. Maryland car repossession laws allow consumers to file complaints against creditors. Anyone who suspects their rights have been violated can contact Maryland’s Commissioner of Financial Regulations.

The “Certificate of Repossession”

According to Maryland’s Department of Motor Vehicles, the purpose of the “Certificate of Repossession” is for “ … conveyance of the ownership of a repossessed vehicle on a certificate of title.” This form is necessary in order for the creditor to verify ownership of a repossessed vehicle. Although the Certificate of Repossession is required in order to resale the vehicle, repossession titles can typically be printed and issued to creditors in the same day.

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