Dude, where's your car? If you're behind on your payments, you may find your car has been repossessed -- sometimes, without your knowledge or consent.
What are the legal steps necessary to repossess a car? Laws differ in each state, but here are some general principles.
Seizing the car
In general, a creditor can seize a vehicle as soon as a lessee "defaults" on a payment, according to the Federal Trade Commission. Check your loan or lease agreement, which should define what a "default" is. Even missing a single on-time payment may be enough.
A creditor can legally repossess a car at any time, without notice, no matter where the car is parked (unless it's inside a part of your house, like in a garage). But repo men can't use physical force or threats. If they do, it could be considered a "breach of the peace," and the repo men could face fines for damage.
Selling the car
In general, a creditor who repossesses a car legally can sell that car to another buyer. But some states require a creditor to tell you the date of auction or impending sale so you can try to buy back the repossessed car. Other states allow you to try to "reinstate" your loan by fulfilling back payments and entering into a new contract with your creditor.
Personal property inside the car
In general, a creditor cannot keep or sell personal property found inside a repossessed car. A lawsuit may be warranted if some of your personal items are unaccounted for.
After a creditor sells a repossessed car, laws may still make you liable for paying the "deficiency" -- the difference between what you owe on your contract and the resale price of the car.
Creditors can take you to court to enforce a deficiency judgment, but they could be out of luck if you have a good defense -- for example, if the repo men breached the peace when repossessing your car, or if a creditor waited too long to sue you. You may want to consult an attorney to ensure the best possible outcome.