Car Repossession

If you fall behind on car payments in Colorado, your lender may have the right to take your car back without going to court. This is called repossession. This process can be stressful, but you still have important rights before, during, and after the repossession. This guide explains: 

• How repossession works
• What you can do to prevent it
• What steps you can take if your car has already been taken 

When can a lender repossess my car?

A lender is a person or company that gives you money and you agree to pay it back later. A lender is usually a bank or a credit union. 

Your car loan agreement usually gives the lender a security interest, meaning they can repossess the car if you do not pay what you agreed to.

In Colorado, lenders do not need a court order to repossess if:

• You are behind on payments, and
• The repossession is peaceful. This means there are no threats, force, or breaking into locked garages.

Lenders must send you a written notice that gives you the chance to pay your loan at least once per year. This is called the right to cure. 

• The lender must give you at least 20 days to pay.
• If you do not pay within the cure period, then the lender can repossess.
• If you do pay during the cure period, then stop paying again the next year, the lender can repossess without a new notice. 

How do I prevent or stop a repossession? 

Option 1: Catch up on payments

If you can, pay what you owe so your account is current.

Option 2: Talk to your lender

Contact your lender as soon as you know you can’t pay. Ask them about:

• Payment plans
• Temporary payment delays
• Loan changes or refinancing

Should I consider bankruptcy if I can’t pay my loan?

If you still have your car, filing Chapter 7 or Chapter 13 bankruptcy immediately stops repossession through an automatic stay. But you still must make payments to keep the car, and you must pay the past-due amounts. 

Bankruptcy can sometimes help you keep the car by letting you pay past-due payments over time in a Chapter 13 bankruptcy.

Review our guide to Filing Chapter 7 Bankruptcy for more information.

How do I review loan documents?

Ask the lender for a copy of your loan agreement. Then find the lender’s right to repossess and the exact balance you owe.

What are my rights during repossession?

When the repossession is peaceful, repossession agents legally cannot:

• Use threats or force
• Damage your property
• Enter locked or secured private areas without permission 

If things get heated:

• Stay calm. Do not physically stop the repossession.
• Document what happens—take photos and videos, and get statements from people who saw it happen.
• If you feel unsafe, you can call the police. Officers are not supposed to help lenders repossess the car. 

What happens after my car is taken?

1. You may be able to get your car back by paying the full loan balance plus repossession costs before it is sold. This is called the right to redeem. Some lenders may accept payment of the amount past due, but they are not required to do that.
2. Notice of sale: The lender must send you a written notice with:
   • The sale date, time, and place
   • How much you owe
   • Your deadline to redeem the car
   • If you don’t get this notice, it could be a defense to a lawsuit.
3. Deficiency balance: If your car is sold for less than what you owe, the lender can sue you for the remaining amount. You can challenge this if:
   • You didn’t get proper notice of your right to pay or of the sale.
   • The car was sold for far less than its fair market value.
   • The original purchase price of the car was less than $3,000.
4. Personal belongings: Lenders must let you collect your personal items from the car. You must do this within 30 days of the repossession.

Are there any special protections?

Yes. 

• The Servicemembers Civil Relief Act (SCRA) can protect active-duty military members from repossession if service affects their ability to pay.
• If repossession agents use threats or harass you, you may have a claim under the Fair Debt Collection Practices Act (FDCPA). This is known as debt collection abuse.

What do I need to remember?

• Keep records: Save everything—letters, payment receipts, and any communications with the lender or repossession agents.
• Act fast: The sooner you respond to late payment notices, the more options you have.
• Request notices: Ask for written notice of your rights and the sale date immediately after repossession.
• Do not ignore notices: Waiting too long to act can lead to losing the car forever.
• Document problems: If the repossession wasn’t peaceful, gather proof right away.
• Don’t forget your belongings: You have the right to get your things back, but only if you get them within 30 days. Don’t leave them behind.
   

Questions to consider

• Was the repossession peaceful and legal?
• Did you receive written notice before the car was sold?
• Are there reasons to challenge any deficiency balance the lender claims you owe?
• Have you collected all personal property from your car?

Repossession is stressful, but you still have rights. Acting quickly, staying organized, and asserting your rights can help you keep your car or limit the financial impact. If you’re unsure what to do next, consider contacting a lawyer or legal aid organization.

Need more help?

If you are low-income, a senior, or a veteran, you may qualify for free legal help from Colorado Legal Services (CLS). To apply or ask if you might qualify, go to the CLS website and find the office that serves your area. If you call or visit, CLS can help you in your native language.

You can get help from the courts. Every judicial district has staff called “Sherlocks” to help people with their legal questions. To find the Sherlock in your county, visit the Judicial Department’s Sherlock webpage.