Car Foreclosure: What to do to fix it when it Happens

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What are the details for foreclosing on a car? When does all this happen and, above all, can we prevent it from happening? Where to Shop Online Automotive Products in Dubai? Here’s everything you need to know on this point.

A vehicle – like a motorcycle or a trailer – is a registered movable asset and its value can be used if the owner is owed to a third party. In cases, like these, car foreclosure can be triggered, a procedure whereby the asset is taken away from the holder to be sold at a public auction.

The sum obtained with the sale is used to recover – totally or partially – the debt. In fact, the procedure is not so simple, since one of the main difficulties is to find the vehicle and bring it to a halt.

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How auto foreclosure works

The substantial difference lies in the fact that the attachment of a car can begin electronically, unlike other movable property which, in order to be attached, must be found in the debtor’s domicile or headquarters. In the case of a vehicle, instead?

The procedure is electronically transcribed to the Pra, thus making it visible also to the police who can proceed with immediate seizure in case of control.

The first step that a creditor who wants to retaliate on a debtor’s vehicle must take is to make a search with the Public Motor Registry to verify that the debtor is the effective holder. You can proceed even if the car is jointly registered with a third party: the proceeds of the sale will be divided halfway between the creditor and the contestant.

The car foreclosure deed

At this point, the bailiff draws up the attachment deed, with the injunction pursuant to art. 492 CPC addressed to the debtor to refrain from any action aimed at removing the vehicle from the procedure started. The act also contains a very specific intimation.

The car and documents must be handed over to the competent judicial sales institute (IVG) based on the debtor’s residence within ten days. The bailiff delivers the attachment deed, served to the debtor, to the creditor to record it in the PRA.

Kidnapping by the police

If the debtor does not deliver the vehicle within ten days, the creditor can request the intervention of the police to search for it. The circular of 8 August 2016 of the Ministry of the Interior provides for the insertion of the details of the procedure in the electronic systems provided to the police forces, in order to identify a vehicle subjected to foreclosure even during a check and immediately proceed with its seizure.

Auction or direct assignment

The Judicial Sales Institute proceeds to sell the car through the auction mechanism. This happens once the necessary notifications and all the bureaucratic steps have been complied with. The proceeds will be passed on to the creditor to the maximum extent of the debt owed.

However, the creditor has a second option: direct assignment, with which he becomes the owner of the vehicle. But it is not automatic: it is up to the Court to assess the value of the vehicle and the amount of the debt.

When does the car foreclosure take place?

The foreclosure of a car is possible following a civil sentence against a person who has contracted debts and who is unwilling or unable to honor.

The case history is very wide: unpaid loans or mortgages, debts with the tax authorities or with local administrations, civil cases for the most varied reasons are valid reasons.

When foreclosure is not possible

Hence, this condition should protect the creditor from a person who owes him a debt. However, there are cases in which the vehicle is not in foreclosure.

For example, when the vehicle is indispensable for the debtor’s profession – for example, the van with which he works – and in any case, the Civil Code provides for a maximum of one-fifth of all seizable properties. In the case of cars purchased with law 104 and used by disabled people or their relatives, the assessment of attachment is up to the Court.

Car foreclosure: doubts and exceptional cases

In this article I have tried to dissect the always thorny issue of the foreclosure of a car, clarifying the procedure and the fields of applicability of the provision.

This is a procedure that protects the creditor. However, the debtor can oppose by seeking an agreement or, ultimately, by paying the amount of the debt and expenses to the bailiff. Did I forget something? Do you want to tell me about a specific case?

This is a procedure that secures the creditor. However, the borrower can oppose by looking for a contract or, inevitably, by paying the amount of the debt and also costs to the sheriff. Did I neglect something? Do you intend to inform me regarding a specific case?