Intro- What is the document? When is it required?
A repossession of affidavit is basically a legal statement that is filled with a motor vehicles department if the lender repossesses a vehicle. The document communicates to government authorities that the vehicle has been repossessed. It also provides information about the action in detail. The document is filed with other documents relevant to the vehicle.
The affidavit of repossession also empowers the lender to obtain a fresh certificate of title without having the name of the borrower on it. The lender is thus allowed to sell the motor vehicle so that the loan’s cost can be covered.
Many lenders usually use the vehicle as collateral while sanctioning a vehicle loan. Till the time the borrower has repaid the loan, the lender has the authority to repossess the car for non-payment. The title includes the lender’s lien, signifying that the borrower has no right to sell the car without proper consent or agreement from the lender.
If a borrower starts lagging on payments, the lender can raise a warning that the vehicle can be repossessed. In case the borrower fails to take any action, the car can be taken back by the lender.
A lender’s agent who is frequently a repossession agency’s freelance representative visits to collect the motor vehicle. The action may require tracking the location of the car when the borrower tried to shift it to a different site. After the lender has got the car in their possession, the affidavit for repossession is filed.
The document intimates government authorities that they have repossessed the vehicle. The document also offers certain identifying details of the vehicle including vehicle identification number, model, and make of the car. It also mentions the remaining amount left to complete the loan while the repossession took place.
The same kind of action can be taken for repossessing boats or any other vehicles. Lenders may also file an affidavit of repossession with a title organization when they repossess a house for nonpayment of the mortgage. The document should be filed so that the borrower’s name is removed from the title. It is done to sell the house in question.
In case a property has been repossessed by mistake, the document can be used to track the error’s source so that it can be returned to the actual owner. Although erroneous repossession is very rare, it may happen.
It is the duty of the lender to intimate the defaulting borrower that they intend to sell the motor vehicle. On the other hand, the borrower is recommended to instantly get in touch with the lender to know their deficiency and arrange for the defaulting payment. Else, the lender can request monthly payments, which are too big for the borrowers to give.
Tips for writing an effective letter or certificate
Relevant authorities may send a repossession letter when a customer is unable to repay a secured loan. Although it can be sent for repossessing any items, the document is usually used for vehicle loans.
An ideal repossession letter should comprise the borrower’s address and name. It should also include the address and name of the entity repossessing the item(s). The letter also typically encloses the list of the products being repossessed and the amount owed on them.
The repossession of affidavit letter should state the reason clearly. The Vehicle Identification Number, the loan account number, and any other details required to identify the vehicle should be also mentioned.
The borrower should clearly write that he is handing over the items or the vehicle to the lender as he cannot afford to make the monthly payments anymore. The document should also mention that the borrower is unwilling to negotiate lower payments. Rather, he/she does not mind giving up their vehicle to the lender.
However, there is no need to mention the reason why the buyer is unable to repay the monthly loan amount. Doing so can cause unnecessary confusion in the minds of the receivers. To cut it short, the letter has to be straightforward and simple. When the borrower surrenders the vehicle, they will also hand over the registration papers and the keys.
There could be certain papers where the lender wants the customer to put their signature while handing over the item/vehicle. The lender should give a written statement to the borrower to establish that the latter returned the vehicle and has no further obligations.
A vehicle repossession letter’s content may slightly vary based on the prevailing state laws. However, the basic needs are that the lender communicates to the defaulting borrower that the loan has been called off and the vehicle has been repossessed. The lender may also explain the subsequent steps to be followed in case the borrower wishes to reclaim the surrendered asset.
The lender can begin the letter by including information on the loan, type of deficiency, and their names. The letter should also confirm that the car was collected as security to settle the defaulting debt. The lender may also have to include these details in their vehicle repossession letter listed below:
- The deadline for the borrower by which the loan can be redeemed.
- The balance outstanding on the loan when the vehicle was repossessed including charges such as relevant fees. States can restrict some of the charges while allowing the lender space to offer extra security.
- The process through which the borrower may make the required payment for redeeming the loan.
- Any other state laws apply. The lender may also have the buyer know that their motor vehicle is being stored within that state according to local requirements. It is done to provide a chance to the buyer to reclaim their personal possessions that were accidentally left in the repossessed car.
- The lender should ensure that they send the letter according to the deadline stipulated within that state. For instance, the defaulting borrower should be intimated within forty-eight hours in the state of California.
- The lender can also provide details on the car sale in their repossession letter. In case the state law permits this, the lender has to include the details mentioned below:
- Information about where the borrower may ask for more details on the process of debt calculation. It may also contain information on the exact application of proceeds, and other details about the sale pending.
- The date on which the intended auction or sale will take place. The information may include the specific location and time for such auction sales. It will allow the recipient to bid on the vehicle or ask their close friends to do so on their behalf.
- The letter may explain the obligation of the borrower in case the proceeds obtained from the vehicle’s sale are less than the amount owed.
The debtor may contact the lender to know the location where they should submit the item/vehicle. After all, they would not wish to leave their car somewhere where it can get stolen or lost.
The borrower can send their letter by mail or even drop it off with the item. In case the letter is sent by mail, they should request a signature to confirm receipt. Doing so will ensure that they have evidence that it was received by the lender.
Samples of Affidavit of repossession
<Name of the Borrower>
<Address of the Borrower>
<City, State, Zip Code>
<Name of the Lender>
<Name of the Lender’s Institution>
<City, State, Zip Code>
Subject: Voluntary repossession of vehicle loan number:_____
Dear To Whom It May Concern/<Name of Lending Officer>,
I am writing this letter to formally intimate you that I would be voluntarily giving up the <Model and year of Car and Vehicle Identification Number>. I am unable to make the required monthly payments as my financial position has altered. I am told that I should surrender my vehicle to you and you will be auctioning it off.
I also acknowledge my responsibility for the differential amount between what amount is procured for the vehicle subtracted from my loan balance. I will drop off the above-lusted vehicle according to the instructions given by you. I will also hand you over the car’s registration papers and keys as well.
You can contact me at <Telephone Number> or at <Your Email Id> in case you have any other queries or wish to give me additional instructions.
Thanking you for your kind attention to this issue.
<Borrower’s Printed Name>
<City, State, Zip Code>
<City, State, Zip>
<Original Creditor’s Name>
<Original Creditor’s Address>
<Name of Car Dealer (Original Seller)>
<Address of Car Dealer>
Subject: Account No. (Collection Agency), Account No. (Original Creditor)
<Vehicle Identification Number>
Whom It May Concern
This letter is being written concerning the above-listed transactions and accounts.
The Original Creditor has repossessed the aforementioned vehicle in the State of <State Name where the borrower lives> dated <Date> and was resold on <Date>.
Kindly send me proof of commercially reasonable manner and legal notices of the resale of the above-mentioned vehicle.
In case no such evidence is sent within two weeks from the receipt date of this notice, the alleged deficiency claimed will be regarded null and void. Also, any continued reporting of the invalid claim on my credit reports or continued collection will be regarded as a violation of the <Act Name> act.
Plus, if you do not comply with my above requests severally or singularly, I will have the right to claim for damages against all involved parties under the applicable statutes.
<Signature of the Borrower>
<Address Of Recipient>
<City, State, Zip Code>
Subject: Loan Account No._______
We would hereby intimate you that the aforementioned account you have with us is in delinquent status. We are contemplating the choice of taking back the <Item Name>, which was funded using this account.
Although we are more interested in getting our due payment from you, this unpaid account of yours leaves us with no choice but to get back the financed product.
Do you sincerely wish to avoid the hassle caused because of repossession, as well as, a negative credit report thereafter? Then, kindly get in touch with us at the earliest.
You may send your remaining payment amounting to <Amount>. In case there is no response from you within <Number of Days> from this notice, the repossession action will be executed for the <Item Name>.
We are expecting a quick revert from you.
<Name of the lien Officer>
<List of enclosed products>
Affidavit of Repossession
I, <Your name> of <Address> certify that there was due from _____________ a valid lien dated <Date> on the motor vehicle described below:
Vehicle Identification Number:
Certificate of Title Number:
I hereby certify that I had defaulted on paying the loan for the above-mentioned vehicle.
1. The undersigned lien holder seized this vehicle without process of the law on <Date> as authorized by the conditions of the loan contract.
2. The debtor surrendered the motor vehicle voluntarily to the undersigned lien holder on <Date>.
The undersigned lien holder also certifies that the above-listed motor vehicle was legally repossessed according to the terms and conditions of the security agreement and following the statutes of California.
<Name of the lien holder> <Authorized signature>
A sample repossession letter for objects other than a motor vehicle might look something like this:
<Entity/Company Name who is doing the repossession>
< Person’s Name, one who has defaulted items>
Dear <Borrower Name>,
We are sorry to announce our intention to repossess the objects you bought on <Date>. This is because you failed to pay <X> amount of money. Our representative will reach your residence on <Date> to collect those objects for which you failed to make the payment.
We are also enclosing the list of items and instructions on where and when to pay so that the repossession action can be avoided.
We would like to regret any inconvenience caused to you but are acting according to the conditions of our agreement dated <Date>.
<Name of the Company Representative>
<Signature of the Company Representative>