Georgia Repossession Basics: Here’s What You Need to Know

Georgia Repossession 101

The process of repossession in Georgia is not governed by any formal set of rules. Rather, it is only subject to a handful of Georgia statutes, as well as the terms of the contract you entered into with the lender when you obtained the property in the first place. Broadly speaking, repossession is the process through which a creditor legally claims or recovers property that has been pledged as collateral on a debt or financial obligation.
As a debtor, either because you missed a payment or because you missed a scheduled date such as expiration of a lease, your property is subject to repossession—the resulting event that occurs after your default. In Georgia, repossession usually occurs with property such as a car, motorcycle, boat, aircraft, furniture, appliances, a home, or personal items .
The most common method of repossession in Georgia is voluntary repossession, which is when the debtor voluntarily surrenders the item back to the repossession company. If the debtor does not agree to voluntarily return the item, then the creditor or their agent will repossess the property without your consent (that is, through forcible entry or taking possession of the car in the middle of the night) in what is known as involuntary repossession.
While the Georgia Code does not have many statutes that address repossession, it does provide some guidelines. As a result, Georgia’s repossession laws are not very prescriptive. The one most applicable to creditors, O.C.G.A. § 10-1-36, allows creditors to seize collateral if the debtor is in default of the loan.

Legal Obligations in Georgia Repossession

Georgia’s Laws for Repossessions
Given the legal cards are typically stacked in favor of creditors, it is important that citizens know which laws their creditors must follow. Repossession laws are no exception. In the state of Georgia, repossession is generally peaceful (without the use or threat of physical force), and as long as the debtor has defaulted on the loan, the creditor has a right to take possession of the collateral—with some stipulations, of course.
First and foremost, the creditor is required by law to act in good faith—to the debtor and the collateral. It is illegal for anyone to engage in harassment or to conduct a repossession by falsely stating that the property in question is subject to a legitimate security interest. Here are a few more legal considerations for repossessions under Georgia law:
Timing. While creditors have the right to peacefully repossess collateral at any time after default, if a debtor is able to prove that the creditor has acted in bad faith—such as repossessing very early in the morning or late at night—that creditor could be charged with converting the debtor’s property.
Location. Georgia law allows the secured creditor to repossess collateral wherever it can be found. On the first day of the term of the debt, The Creditor can Repo The Collateral if it is in your possession and they have No Peaceful way to get it. If they are seeking to Repo your property by entering your home, they are required to first get a Court Order allowing them to do so.
Documentation. Depending upon the circumstances, your creditor may be legally required to send you a written notice informing you that the property is subject to repossession, but not always. In most circumstances, a written notice is either requested or required by Georgia law, but sometimes is not required. It all depends on your individual situation.

Repossessed: Now What?

Georgia repossession laws are not all that common, compared to foreclosures and garnishments. Georgia repossessions are typically conducted by finance companies and car dealerships in the event of default under a loan or security agreement. When default occurs under a security agreement, the lender or creditor is allowed to repossess the security for the loan or secured obligation. Repossessed items are typically then sold at auction.
In Georgia, creditors and lenders must practice "commercially reasonable" conduct in holding auctions of repossessed property. Repossessed items are typically sold to the highest bidder, and the process is overseen by a court official. The lender/creditor may keep the repossessed item if it bids the highest at auction. In practice, this rarely occurs. Repossessed items are usually sold to third parties.
The money received at the auction is applied first to payment of expenses of the repossession and the sale (such as repossession agent fees, site attendance fees, repairs needed to get the repossessed vehicle or other item in a position to sell at auction, and advertising costs). After expenses are satisfied, the remainder of the auction proceeds will be applied to the debt and open balance of the loan or secured obligation.
If the auction proceeds are insufficient to satisfy the debt the creditor/lender can proceed to assert a deficiency judgment against you for the unpaid balance. A deficiency judgment is a personal judgment to collect the debt owed, usually obtained after repossession of collateral. If you obtain a Georgia repossession attorney or Georgia repossession lawyer, he or she can pursue this and stop the cycle of lenders and creditors "re-peating" the repossession process.
Foreclosure or repossession is NOT the end of the story. As a Georgia repossession lawyer, I have been able to stop a lot of foreclosures and repossessions of cars, trucks and other repossessable items.

Consumer Rights in Georgia Repossession

Your Rights As A Consumer During Repossession Do Not Just End With "When And Where It Happens". In Georgia, You Must Be Given Certain Protections And Have Certain Rights. Here’s A Few Of Them. Use Em. Know Them. They Are Your Rights. AND You Can Complain About Wrongful Repossession.
These rights do vary somewhat between automobile repossessions, boat, motorcycle and other property repossessions, by the way of example. However, in general a consumer has certain rights in Georgia during the repossession process. The creditor or debt collector is required to send you a 10 day letter before they go out to repossess the property. This letter states you are in default, they intend to repossess the property, and you have 10 days to cure the default and get the borrower(s) up to date as if nothing ever happened. If you do this , they cannot repossess. (See, Georgia UCC)
If you do not do this, then they are only allowed to do peaceful repossession. No breach of the peace. No damage to other property. No damaging the car or other property they are taking. Peace out in Georgia. After they have repossessed the property, they must send you a notice of the sale. They must then hold a public sale of the property within a reasonable time. Even after the sale you have certain rights and protections. If they do not comply with all of this, you can sue in superior or state court in Georgia for damages and seek the recovery of attorney’s fees, costs and expenses. To get a short version of these laws, just remember 9 things: When, 10, peaceful, no breach of the peace, damages, no damages, no commercial unit, public sale, sue.

How To Prevent Repossession

One of the best ways to avoid repossession in Georgia is to stay in contact with your lender. If you are behind on payments, working out some kind of payment plan can help. Lenders don’t want to repossess your car, try to work out a plan with your lender on how to make up payments.
If payments aren’t possible due to unforeseen circumstances, you may be able to get an extension from your lender. You should provide documentation of the hardship in writing.
If you can afford the minimum payments, but are behind on your payments, lenders may be willing to make arrangements for you to jump back on track with your payments.
If you would like to keep the car, you may be able to refinance your loan and possibly lower the monthly payments or get some cash back in your pocket.
If you are not happy with the terms with your current lender, you can look for other lenders that may offer better terms than your current lender. Sometimes brokers can help you with this.
Sometimes loan modification programs can help borrowers get on track with their payments or simply get some cash back in their pockets. A loan modification can lower your monthly payments or extend the term of the loan.
If you have filed for bankruptcy, you can keep your home and car if you can continue making payments. This can prevent costly repossession fees.
If you are facing repossession and are unable to keep your car, it may make sense to voluntarily furnish the vehicle to the lender. If the lender will allow you to keep the car for certain amount of time before repossessing the vehicle, then you can use the vehicle, drive it to work or to school or to reduce a rental car expense. Sometimes the lender will negotiate with you.
If your car has already been repossessed and your lender won’t agree to pay the repossession and storage fees, the law allows you to get your car back by paying the amount owed by Certified funds. If you wait too long to get back the vehicle, you may lose the right to do so and the lender may sell the vehicle at an auto auction. Sometimes, if you get your car back quickly without the lender having to incur a lot of fees, you can get the vehicle back at a discount.
Another option that is sometimes available is to sell the car yourself, use some of the proceeds to pay off the vehicle and negotiate with the lender to forgive the balance due. You often will be required to return the vehicle to the lender, but in return, the lender often agrees to waive any deficiency balance.
If you can’t afford the payments long term, you should recognize that the lender has its rights under the loan agreement. If the creditor asks for the keys, you should give them to the creditor; it is better than the lender damaging your home and property to get the vehicle back.
If you feel the lender has violated your rights in some way, such as repossessing when you are not behind on payments or your vehicle was taken from you during times when the law prohibits repossession (see above) or the vehicle or your property was damaged during repossession, you may be able to recover damages through legal action against the creditor. Often these violations are only minor claims, or even perhaps for small amounts, but nonetheless they are valuable as a means to assert your legal rights.

Help with the Law

If you are facing repossession in Georgia, it is vital that you know your legal rights. A knowledgeable attorney can provide you with the legal assistance you need to ensure that your legal rights as a debtor are protected. As such, here is a general primer on legal resources available to those facing repossession in Georgia. The State Bar of Georgia ranks among the most comprehensive state bar associations in the United States. The State Bar of Georgia is charged with regulating the practice of law in the state . It has a lawyer referral service that provides detailed information about lawyers practicing in all areas of law across the entire state. The American Bar Association, or ABA, is the largest and most powerful professional association of lawyers in the world. The ABA, through its website, provides useful resources for individuals needing help finding legal representation in Georgia and elsewhere. The Georgia Legal Services Project is a consortium of legal aid organizations serving low-income Georgians across the state. You can visit its online resources for help finding services and/or an attorney.