You can’t win ‘em all. Inevitably, some forfeiture challenges are lost and in some cases, it is not legally or economically responsible to continue to challenge the forfeiture of a vehicle. However, even after the vehicle is lost, the ALF Forfeiture Coordinator continues to work on your behalf to protect your interests, your credit, and your wallet.
Representation after Forfeiture
When the laws and the facts of a case point toward the inevitable loss of a vehicle, the Forfeiture Coordinator may come to the conclusion that it is no longer economically or legally viable to continue to challenge a forfeiture. Client representation doesn’t end there, however. Many times, the owner is either leasing the vehicle from a leasing company such as Intelligent Car Leasing or still owes money on an auto loan. In these cases, Appelman Law Firm works with all involved parties to ensure that their client is well-represented throughout the process.
Forfeiture and Your Credit
In addition to losing their vehicle, owners who still owe money to a lienholder (auto loan company) can face a serious hit to their credit. This would affect when people look to other lenders (like https://www.sofi.com/money/, for instance) in the future.
When an owner is still making payments on their auto loan, Minnesota law states that the loan company has a security interest in the vehicle. The forfeiting agency is required to notify all owners on the title of the forfeiture, including all parties with a security interest. Because of this, the lienholder will be made aware of the fact that the vehicle has been forfeited. Additionally, any party with a security interest in the vehicle has a presumptive priority of the interest of the forfeiting agency. This means that when a vehicle is forfeited and its owner still owes money to a loan company, the forfeiting agency may return the car to the lienholder and not the owner. It might be worthwhile checking out SwapALease rather than being stuck with auto loan payments.
During the negotiation phase of the forfeiture process, Appelman Law Firm encourages its clients to continue to make payments on their vehicle. Most lienholders this as an act of good will and responsibility and will refrain from negatively affecting the owner’s credit at this point. Additionally, if the vehicle is returned to the lienholder, they may be willing to overlook the fact that this is technically a repossession, which can also hurt the owner’s credit.
For some owners, making payments on a forfeited vehicle that they cannot drive is too much of a burden. Appelman Law Firm will work with these clients to ensure that they are not taken advantage of while waiting to challenge the forfeiture of the vehicle.
Note: Many contracts between the owner and the lienholder have an acceleration clause which requires that the balance of the loan be paid in full after any missed payments.
The Vehicle’s Return to the Lienholder
According to MN law, the lienholder’s interest in the vehicle is superior to that of the forfeiting agency, in most cases, the forfeiting agency will return the vehicle to the lienholder. After the vehicle has been returned, the lienholder will often place the vehicle up for auction. This is done to recuperate the money which the owner still owes on the vehicle. However, before the lienholder is able to recover this outstanding balance, they must first deduct the forfeiting agency’s costs for seizure, towing, and storage of the vehicle.
After the lienholder has recovered what was owed and has paid the fees to the forfeiting agency, there will sometimes be excess proceeds from the sale of the vehicle. In most cases, these proceeds must be returned to the forfeiting agency. However, in some cases, the Forfeiture Coordinator may fight for this money to be returned to the client-the owner of the vehicle.
