Arizona Car Title Loan Laws
Arizona and Repossession Laws
Arizona car title loan law states that if you are in default (i.e. aren’t making your monthly payments), then the title loan lender can take possession of your car even if they don’t have a court order to do so – as long as they don’t “breach the peace”.1)A.R.S. § 47-9609
The Arizona title loan lender statutes don’t define what it means to “breach the peace” but the general rule is that the creditor cannot utilize force or threats, cannot enter a debtor’s residence without consent, and cannot seize any property over the objection of the debtor.”2)Repossessions, National Consumer Law Center, 7th Ed..
Arizona courts have ruled that title loan lender repo agents cannot bring a police officer with them when they come to repossess the car, even if the police officer does nothing but stand there – and if they do it invalidates the repossession. 3)See Walker v. Walthall, 121 Ariz. 121, 124 (1978)
Other courts have held that the following actions “breach the peace”:
- Grabbing keys from the debtor and twisting their wrist;
- Pushing a door open and striking the debtor in the stomach;
- Touching a resisting debtor to any extent;
- Towing a car away while the debtor is inside it, despite their protests;
- Running over the debtor’s foot with a car and flashing a gun;
Your Remedies for Unlawful Repossession in Arizona
So what happens if a title loan lender creditor doesn’t follow the law and breaches the peace while they are repossessing your vehicle? First, repossession can be invalidated and you can get your car back. Second, you can seek payment of damages based upon Arizona statute and the actual damages you incurred.
Is It a Crime in Arizona to Not Turn Over Your Car?
Yes but with caveats. It’s not unusual for title loan lenders in Arizona to think it’s ok for their repo agent to take a borrower’s car and told tell them if they didn’t turn the car over they could be charged with a felony and face jail time and fees.
It is true that Arizona has a law4)A.R.S. § 13-1813 that makes it a felony to unlawfully fail to turn over a car that is subject to a security interest but there are very specific requirements that must be met first before you could be charged with a crime:
- First, you must be at least ninety (90) days past due;
- Second, the bank, title loan lender (or other lender) has sent you written notice via certified mail return receipt, that you are ninety (90) days late in making a payment and are in default;
- You fail to get caught up on the payments within the next thirty (30) days.
Only if all three of these elements are met and then you fail to turn the vehicle over do you run the risk of having a felony charge. And be aware the Maricopa County Attorney’s Office rarely prosecutes these as crimes.
Title loan lender repo agents throw this statute around as if merely refusing to turn a car over results in a felony charge.