Recently on our legal forum a user asked, “I have lost my job and I have not made car payments in a few months. I know they are looking for my car. I am about to get a personal injury settlement payment which should be more than enough to pay off my car loan. Can I hide my car from the repo man until I get my personal injury payment?”
Under the loan agreement if you fail to make car payments, the creditor has the legal right to repossess your automobile without advance notice and without filing a lawsuit against you. Repossession can occur immediately or the lender may simply decide to accelerate payments on the loan and ask for the balance of the loan to be immediately paid.
If you are late making your car payments your creditor has the legal right to hire a repo man to come and take possession of the car. Although the repo man is not supposed to do anything that would breach the peace, they are legally allowed to come on your property. You are also barred from threatening or taking actions to stop them from repossessing your car.
When determining whether or not it is illegal to hide a car from the repo man it’s important to understand the laws in your state. Not all states criminalize this action, but in Texas if you have obtained a loan to purchase a car and you do not make payments, per the contractual agreement you are supposed to make the collateral available to the lien holder when they demand it.
In fact, under Texas Penal Code § 32.33 Hindering secured creditors, it is illegal for you to “conceal, remove, or harm, etc. property on which there’s a lien” with the intent to hinder enforcement of the lien.”
You may or may not be charged with a criminal offense, but under the law you can be charged with a Class C misdemeanor, Class B misdemeanor, Class A misdemeanor, or a state jail felony, depending on the value of the asset which was “destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value.”
Not only is hiding the car in Texas potentially against the law, it also may not work. In fact, if you continue to hide the car the creditor can use a process called replevin. Replevin allows the creditor to file a lawsuit against you with the court. The court can then issue a court order ordering you to give the car to the lender.
Failing to follow the court order can result in both civil and criminal penalties. If you lose the court case you will also have to repay the loan balance, court costs, and other penalties.
Bottom Line: Even if you could legally hide your car in Texas at best this is a temporary solution. Not only could it be repossessed at any point in your driveway or on a public street, it’s likely at some point the Department of Motor Vehicles as well as your insurance company will be notified and you will likely lose your plates and the ability to purchase car insurance.
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