If your car or other item of personal property was repossessed, you may be able to get it back. The two ways to get your repossessed property back are by reinstating the contract or redeeming the property.
(To learn when creditors can repossess your property, how it works, and more, see the articles in our Repossession of Cars and Personal Property area.)
Getting Property Back by Reinstating the Contract
If your car or other property is taken, some states give you a short time during which you can get it back by reinstating the contract. Reinstatement means getting the property back and resuming the payments under the terms of the original agreement. In order to reinstate, you must fix the problem that caused the creditor to declare the default—for example, by paying all past-due payments and late fees, getting required insurance coverage, or paying unpaid fines or taxes—and pay the costs the lender has incurred in taking and storing the property, often several hundred dollars.
The right to reinstate is limited, however, and, depending on your state law, you probably can’t get the property back if you:
- had the contract reinstated in the past
- lied on your credit application
- hid the property to avoid repossession, or
- didn’t take care of the property and its value has substantially diminished.
Under state laws, ordinarily, the lender must give you notice of your right to reinstate the contract after repossession, even if the lender thinks you have given up the right. If the lender doesn’t give you this notice, you may have the right to get the property back for nothing—but you will have to resume making payments on your loan. If you have been given notice and want to try to reinstate the contract, contact the lender as soon as possible to work out an agreement.
If you don’t reinstate the contract within the time permitted by the agreement, the lender will send you a formal notice of its intent to sell the property.
Every state allows you to redeem the property—to pay the entire balance to get the property back. To redeem property, you must pay not only the entire balance of the contract (instead of just the past amounts due), but also repossession and storage costs. You can redeem property within the time allowed, which is usually up to shortly before it is sold.
Redemption is rarely feasible. If you couldn’t make payments in the first place, you probably can’t come up with the entire balance due under the contract. Some people take out a home equity loan to get the money. This is dangerous: If you default on the home equity loan, you might end up losing your house instead of the personal property. Redemption might make sense if the property, such as your car, is essential to your livelihood and you can get someone to help you come up with the money to redeem it.