What You Need to Know About Wrongful Repossessions

No Notice Required

In a typical scenario, a finance company or bank can order the repossession of your car or truck if you fall behind on your monthly payments. The bank is not required to give you any prior notice before repossessing the vehicle. Under Arizona law, the company employed to pick up your car --- the repossession or repo company --- can take your car out of the driveway, from a parking lot at work or at the store, or from any other place you may park the car which does not have any access restrictions. They cannot go through a garage, a locked gate or fence, or anything else which blocks access to the car.

Breach of Peace

In taking possession of a vehicle, the repo company cannot take any action which would be considered a "breach of the peace." Breach of the peace includes use of bodily force, threats, trespass, deception or trickery. A repo company also cannot enter your residence without your consent, and cannot seize property over your objections. 

I have seen cases where the repossession company will stake out a home waiting for the debtor to leave with the vehicle and then follow after it. This is legal so long as It does not follow too closely, drive recklessly or otherwise try to intimidate the debtor.  Forcing the debtor off the road, or pinning them into a place where they cannot leave is also a breach of the peace.


Victims of a wrongful repossession or breach of the peace by a repossession company in Arizona can pursue damages against the repossession company and the bank for damages. The bank is liable to the damages caused by the repossession company. 

Arizona Statute of Limitations Law for Repossessed Car is Four Years

Collecting a Deficiency Balance on a Car Loan.

When an Arizona consumer loses a car to repossession, the bank typically sells the car and applies the proceeds from the sale to the balance owing on the loan. If the car does not sell for enough to pay off the loan balance, the bank will usually try to collect this balance — known as a deficiency balance — from the Arizona consumer. Other times the bank will sell this “loan balance” to a third party or “bad debt buyer” who then tries to collect from the debtor.

The Lawsuit Must be Filed within Four Years of Default.

A creditor, whether the bank or a bad debt buyer, has only four years from the date of default to file suit against an Arizona debtor to collect the deficiency balance for a car loan. A.R.S. § 47-2725 states:

      A. An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.

The cause of action accrues no later than when the car is repossessed. If a creditor repossesses the car then clearly it considers the account in default. However, in most situations payments have been missed for several months before the car is actually repossessed, so the four year statute of limitations period may have begun to run several months before the car is actually repossessed.

Statute of Limitations is an Affirmative Defense.

In order for a consumer to be protected from judgment under Arizona law, the defense of statute of limitations must be raised in the lawsuit by the consumer. If the consumer fails to assert the defense of statute of limitations, then the court may give the bank or debt buyer judgment.

Find Out if the Statute of Limitations Defense Applies to Your Case.

I regularly represent Arizona consumers who have been sued for deficiency balances on repossessed cars.

If you are an Arizona debtor who has recently been served with a lawsuit to collect an auto loan deficiency, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation.