Texas law allows lenders to repossess a collateral vehicle if the borrower has missed payments, according to the Fealy Law Firm. There are no restrictions on how behind on payments the debtor must be, and the lender does not have to provide notice.
Article 9 of the Texas Business and Commerce Code allows lenders to acquire the vehicle as long as they do not breach the peace, explains the Weber Law Firm. A breach of peace includes forcing entry, threatening violence or creating a disturbance. If the owner or driver of the vehicle is present and contests the repossession, this also constitutes a breach of peace. If someone in the immediate vicinity protests the repossession, the law requires the creditor to cease the attempt and leave. The lender can lawfully repossess the vehicle from a public street or parking lot without the owner present.
Vehicle owners who are late on payments should contact their creditors immediately to make arrangements to avoid repossession, states the Fealy Law Firm. Lenders can auction off the vehicle and sue the borrower for any remaining amount of the loan that the proceeds do not satisfy. The lender must provide 10 days notice of the auction. If the borrower is unable to pay, a Chapter 13 or Chapter 7 bankruptcy may allow the lender to regain possession of the car or avoid a deficiency judgment on the balance after auction.