FDCPA Law

If you bought your boat on a loan, the lender will likely have a lien put on the boat title. The lien lasts until the loan balance is fully paid off. If you do not adhere to the terms of your loan, or if you default on your loan, the lender will generally be able to repossess the boat. The specific details outlining what constitutes a default will be stated in the loan contract, however the most common reason is the boat owner’s inability to make monthly payments on time. Still, when the boat owner defaults, the lender must adhere to certain rules in order to repossess the boat. If these rules are not followed properly, the repossession may be illegal.

The following rules must be followed by the lender:

1. The lender’s agent is not allowed to “breach the peace” in the act of repossessing your boat. In the state of Minnesota, the repossessing agent (referred to colloquially as the “repo agent” or “repo man”) can take your boat at any time of day, without giving you notice. The repo agent does not need to have a court order, assuming that they do not breach the peace in the act of seizing your boat. An example of a breach of the peace would be if the repo man threatens you, or uses force to take your boat. Breaking into a locked garage usually qualifies as a breach of the peace. Once the repo man breaches the peace, he no longer has the right to take your boat. He now needs to get a court order in order to repossess it. If he takes your boat before getting a court order, then your boat had been repossessed unlawfully.
2. If the lender has been regularly accepting late payments from you, the contract terms may be deemed modified. The lender is not allowed to take your boat until the loan is in default for a reason other than you were making consistent late payments (because they consistently accepted said late payments). In addition, the lender is required to give you notice, typically in writing, that your future late payments will not be accepted. In Minnesota, these are called Cobb letters. If your lender has consistently accepted your late payments, failed to send you a Cobb letter, and repossesses your boat, these actions likely constitute an unlawful repossession of your boat.
3. The repo agent is not permitted to ask the police to assist in repossessing your boat. In fact, the repo man cannot even threaten to call the police in order to assist in taking your boat. This would be a violation of the Fair Debt Collection Practices Act. If police are called in during the act of repossession, their role must be solely to maintain the peace and order, nothing more. The reason for this is that the state is required to provide you with “due process” before they become actively involved in taking your boat. This necessitates that you are first provided with notice and the opportunity for your case to be heard in court. A private repossession company is not considered a state or government agent. They typically are not required to provide you with notice and the chance for your case to be heard in court. Therefore if a police officer assists in the repossession of your boat, this may be in violation of your rights. The state cannot take your boat without first providing you with due process.
4. If you paid off the full remaining balance on your loan, yet nonetheless the lender fails to release the lien on your boat’s title and repossesses your boat, this is an unlawful repossession of your boat.

If your boat was unlawfully repossessed, you may have claims against the lender AND the repo man for statutory and actual damages. You may be entitled to thousands of dollars more than you are currently being offered by the lender or repossession company, if you are even being offered anything at all. For a better understanding of the damages you may be entitled to and a Free Case Evaluation, please contact our attorneys now at 952-361-5556 or fill out the Free Case Evaluation Form.

For further reading, refer to the following list of wrongful repo practice areas that our attorneys specialize in: