Audio File: Navajo
(PDF 168.31 KB) Repossesion of Property in New Mexico
Repossession of Property in New Mexico
What is repossession?
When you buy property (a vehicle, mobile home, furniture, etc.) but don’t pay the entire
sales price at once and the dealer or a bank loans you money to pay off the price in
installments, the lender takes a security interest in the property. So if you do not pay
back the money as you promised, the creditor has the right to take back the property.
This process is called repossession.
What happens if you fall behind on your payments?
· If you are late on a payment, the creditor can choose to accelerate your loan. You
will then owe the creditor the entire amount due on the loan.
· If you can’t pay the entire amount due on the loan in a certain time period (usually
10 days), the creditor can then take back, or repossess, the property.
· The creditor must follow the law when repossessing your property. In New
Mexico, the creditor can use what is called “self-help repossession” to take back
your property. This means that he can come and take the property so long as he
does not breach the peace to do it. This means that he cannot take the property by
force. If a repo person hits you, pushes you or threatens you, he has breached the
peace.
What should you do to avoid repossession?
The best way to avoid repossession is not to be late on your payments. But sometimes
you fall behind because of events outside your control. What do you do?
· Call or go to see your creditor. Most of the time your creditor is the best person
to help you avoid repossession. They can help you set up your payments so you
can get caught up. They can give you extensions, lower your payments and manyother things to help you avoid repossession. Keep in mind that it you drive your vehicle to the creditor, it might be repossessed by self-help.
· Get a loan. Relatives or friends may be able to give you a loan so you can catch
up with your payments. Usually a creditor won’t repossess your property if you
bring your account current even though he has accelerated the loan and has the
right to repossess.
· Refinance your loan. Go to a bank or a credit union to see if they will pay off
your original creditor and then you can start making payments to them.
You are responsible for paying your debts. If you do not pay on your loan, eventually the
creditor will repossess. The creditor can be your friend, not your enemy—work with the
creditor to keep your payments current and avoid repossession.
What happens after repossession?
After your vehicle is repossessed, or if you turn in the vehicle without getting the dealer
to agree to waive any deficiency, you may still owe money to the dealer. This is called a
deficiency. The deficiency is the amount still due on your loan after the vehicle is resold.
The repossession and the deficiency will be reported on your credit history and will
damage your credit.
What about Navajo Nation repossession laws?
If the vehicle is on the Navajo Nation, the vehicle cannot be repossessed without a
Navajo Nation Court Order or your written consent at the time of the repossession. New
Mexico repossession laws do not give you as much protection. Once you leave the
Navajo Nation, a repo person can take your property without your written consent or a
court order—so if you see a car dealer to work out a payment schedule on your vehicle,
have someone give you a ride if the creditor is off the Navajo Nation.
· Don’t take your vehicle off the Navajo Nation if you are behind on payments.
· If you do have to take your vehicle outside the Navajo Nation do not take it near
the dealer’s lot.
· If you leave your vehicle unattended in a border town, you may find that the
vehicle has been repossessed while you were shopping. This would be a legal
repossession.