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Personal Property in a Repossessed Vehicle

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Question: 
Once a vehicle securing a delinquent loan is repossessed, how long legally do the personal contents have to be held before they can be disposed? Our repossession letter allows the customer ninety days to pay off the loan before it is sold. However, the letter does not mention personal contents.
Answer: 

I am not aware of any statute or regulation that governs the giving notice or return personal property that may come into the possession or control of a secured party during the repossession of collateral. I suggest you check your state law to determine if a state statute exists.

Unless an applicable state statute provides otherwise, the property should be held for a "reasonable time" prior to disposal. Ninety days should be more than adequate.

The notice could be included in the the repossession letter as you suggested. If the bank handles its own repossessions, an inventory of the repossessed vehicle should be conducted as soon as possible after recovery. The notice should indicate what personal property is being held, who is the contact person, and the length of time it will be retained prior to disposal.

If the repossession is handled by a repossession service, your agreement with them could require the service to conduct the inventory and hold any personal property for the owner to pick up.

First published on BankersOnline.com 7/1/02

First published on 07/01/2002

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