What is an Affidavit of Repossession?
How does it work?
What are the essential elements you should know!
In this article, I will break down the notion of Affidavit of Repossession so you know all there is to know about it!
Keep reading as I have gathered exactly the information that you need!
Let’s see what is the meaning of a repossession affidavit and how it works!
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What Is An Affidavit of Repossession
An affidavit of repossession (or a repossession affidavit) refers to a document signed under oath required to repossess the title of a property.
In other words, an affidavit of repossession refers to a legal statement made by a lender who is repossessing a vehicle or property.
In most cases, the repossession of property relates to property like:
- A motor vehicle
- A boat
- Outboard motor
The affidavit is executed by the lienholder or repossessor informing the authorities that it has in fact repossessed a vehicle.
Ultimately, the lender can request that a new certificate of title be issued designating it as the vehicle owner so that the automobile or property can be sold.
It’s also worth noting that it may happen that a lender repossesses the wrong vehicle or makes a good faith mistake when seizing property.
If that happens, the “affidavit of repossession” will be a key document to trace the error and restitute the property to its rightful owner.
In most cases, the repossessor or lienholder is the bank, creditor, or financial institution that lent money to the vehicle owner to purchase the car and the owner has failed in paying back the loan (right of repossession)
For example, if you want to purchase a car for $50,000 and you plan on leaving a $10,000 deposit, you will then need to get a car loan to cover the remaining balance of $40,000.
If you borrow money from the bank, the bank will give you $40,000 but in exchange will want to take the car as collateral to ensure that you will pay back your auto loan.
When the car loan is paid off, the lender will discharge the lien on the car.
However, if the loan is not paid back or you go into default, the bank (as the lienholder on the car) can repossess the vehicle to get paid.
The lender will eventually want to sell the automobile and use the proceeds to pay the remaining and outstanding balance on your car loan.
Certificate of Title
A lender can seizure a movable property like a car, automobile, RV, boat, ATV, motorcycle, or any other type of motor vehicle if the borrower fails to respect the terms of a security agreement signed to finance the vehicle.
By filing the affidavit, the lender’s ultimate objective is to get title to the automobile, sell it, and get paid back for the loan or money lent to the borrower.
Similarly, a lender can file an affidavit of repossession with a title company to repossess a home should the homeowner fail to respect the terms of a mortgage agreement.
Who Repossesses Property
Generally, the lender will send an agent representing it to seize the motor vehicle, car, vessel, or property in question.
Once the repossession agent is mandated to seize the automobile or property, it will:
- Perform some investigation to track the location of the property
- Physically go to where the property is located to seize it
- Put the property in safekeeping until the legal paperwork and legalities are handled
The lienholder will eventually need to complete a repossession affidavit and file it with the authorities confirming the seizure (or repossession).
The government receives the repossessed motor vehicle affidavit, it is legally notified that the lender has exercised its right to repossess the vehicle and is informed of the details of the automobile.
Affidavit of Repossession Examples
Let’s look at a few examples of when an affidavit of repossession may be used.
Example 1: Repossessed Motor Vehicle Affidavit
In Texas, a “Repossessed Motor Vehicle Affidavit” must be completed when a vehicle is repossessed.
In the affidavit, the following information must be specified:
- Vehicle information such as VIN, year, make, body style, and model
- Lienholder information
- Method of repossession (Term of Security Agreement or lien, sequestration, floor plan lien)
- Certification by the authorized agent that the statements in the affidavit are true
Example 2: Affidavit of Repossession of Vehicle, Boat, or Outboard Motor
Another example is the Affidavit of Repossession of a Vehicle, Boat or Outboard Motor required in Oklahoma.
The information contained in this affidavit includes:
- Identification of party repossessing the vessel
- Vessel information (number, make, length, year built, hull identification)
- Outboard motor information (number, make, year built, horsepower, serial number)
- Method of repossession (terms of chattel mortgage or sequestration)
- Certification of the statements to be true
The repossessing lender must respect the repossession requirements for its application to be approved, namely:
- Complete the repossession affidavit
- Provide the original or certified copy of the chattel mortgage, conditional sale contract, or security agreement
- A notarized lien release statement
- For motor vehicles, the Insurance Security Verification Form will be required
- For manufactured homes, proof of current calendar year taxes paid
Example 3: Repossession Affidavit
A third example can be the Repossession Affidavit required in Kansas.
The information needed in the affidavit for repossessed motor vehicle is:
- Secured party’s name and address
- Security party’s contact information
- Date security agreement was signed or executed
- Date vehicle was repossessed
- How repossession took place (voluntary surrender by debtor, replevin, peaceable seizure, other)
- Vehicle information (year, make, style, VIN)
- Certification that the affidavit content is true
A lender who intends to repossess a vehicle in Kansas must respect the following requirements:
- The vehicle must be in the lienholder’s possession
- The owner of the vehicle must reside in Kansas or received financing from Kansas institution for the purchase
- Application for title must be completed
- Repossession affidavit completed
- Other requirements in case the vehicle was titled outside of Kansas
Affidavit Repossession Takeaways
So there you have it folks!
What does an affidavit of repossession mean?
How is it used?
In substance, an affidavit of repossession (sometimes called repo affidavit or repo statement) is a legal document a lienholder must file when repossessing property such as a car, motorcycle, recreational vehicle, boat, or property bearing legal title.
The document communicates to the government authorities that:
- A lender has repossessed a vehicle or property
- Provides details about the vehicle or collateral property repossessed
- Contains a certification that the information in the affidavit is true and accurate
When a lender performs a repossession of collateral property, they can ultimately obtain a new certificate of title designating them as the property owner (removing the borrower’s name on the property title).
Ultimately, the lender will be in a position to sell the vehicle or asset to use the sale proceeds to pay off the borrower’s outstanding debt.
Very often, lenders will lend money to borrowers looking to purchase a vehicle and to protect their loan, they will register a lien against the car itself.
The borrower’s title will include what’s called a “lender’s lien” preventing the borrower to sell the vehicle without the lender’s consent.
I hope this article helped you better understand the meaning of affidavits for repossession, why they are used, and how they work.
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Affidavit of Repossession Meaning
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