Q:

How does the repo process work on a used motorhome?

A:

Quick Answer

The process for repossessing a motorhome operates in the same way as any other repossession. The laws on repossession vary by state, but in general a financed motorhome may be repossessed by the lender when the borrower defaults on the loan.

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Full Answer

Once a borrower defaults on a loan agreement for a motorhome in any way, the lender has the right to repossess the motorhome. What constitutes a default of the loan will be specified in the loan agreement. The loan agreement will also explain the lender's repossession policy, the borrowers rights in the event of a repossession, and any state-specific laws governing the repossession.

Depending upon the loan agreement and the laws of the state, the lender may be required to give written notice that the borrower's payment is in default. Once the lender has provided notice of default, the lender may be required to provide the borrower with a notice of repossession, along with an explanation of the borrower's rights. The notice must inform the borrower that the creditor has accelerated the debt and that the full amount of the loan is due. Once the creditor has provided all notices required of it by contract and applicable state law, it may enter the borrower's property to seize the motorhome and sell it at auction to satisfy the loan. Some states require that creditors must avoid "breaching the peace" in repossessing a motorhome.

Many states provide borrowers with the opportunity to cure the default that led to the repossession. In these states, the borrower has a set period of time to make up all late payments and fees, obtain insurance or otherwise rectify the default before the creditor may take further action.

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