Legal Question in Credit and Debt Law in California

This is what DNA Legal Services states about Reservation Repos:

http://www.nativelegalnet.org/node/52

Repossession of Property on the Navajo Nation

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 (usually10 days), the creditor can then take back, or repossess, the property.

*

The creditor must follow the law when repossessing your property. The law that applies will vary depending on whether you live on the Navajo Nation or on state land. If he follows the law, the creditor will eventually be able to repossess your property.

What should you do?

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 many other things to help you avoid repossession. BUT DON�T TAKE THE PROPERTY WITH YOU OFF THE RESERVATION WHEN YOU GO TO TALK TO THE CREDITOR. It�s easier for the creditor to repossess your property once it is off the reservation.

* Get a loan. Relatives, friends or the Navajo Nation 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 if the creditor takes you to court?

* You will receive a notice from the court telling you there will be a hearing.

* The hearing will be in front of a Navajo Judge where you can speak in Navajo.

* Explain to the Judge why you are behind on your payments.

* The Judge will decide whether to order the repossession.

* Remember that if you are still behind on your payments at the time of the hearing, the Judge will probably order repossession.

* If you want to return a vehicle to the car dealer; ask the dealer to agree IN WRITING to waive the deficiency in exchange for your voluntary surrender of the car.

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.

* Do not sign anything if a repossession person tries to take your property.

* Tell the person to get a court order. To repossess property on the Navajo Nation, there must first be an official court order.

* Never give up your keys to the repossession person.

* Sit in or on the property and refuse to move.

* Never let any collector take your property by force�no one can force you to give up your property except by a court order.

* If you are behind on payments, do not take your vehicle outside the Navajo Nation. If you take the vehicle off the Navajo Nation, you may be subject to �self-help repossession�, which does not require a court order.

* Even if you are behind on payments, the repossession person cannot take your property if you haven�t signed a consent form saying he can remove your property from the Navajo Nation. This form must be signed at the time of the repossession to be valid. If you don�t sign a consent form, your property can only be repossessed if the creditor gets a Navajo Court Order. A state court order is NOT good enough. If a repossession person takes your property from the Navajo Nation without your written consent or a Navajo Court Order, you may sue for money damages. Seek legal counsel immediately if this happens.

What about state repossession laws?

State repossession laws do not give you as much protection. Once you leave the Navajo

Nation, a repossession 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.

* Once the property is off the Navajo Nation, the creditor can repossess as long as he does not �breach the peace� � this means that he cannot take the property by force.

* If a repossession person hits you, pushes you or threatens you, he has breached the peace.

* 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.