Home > News > Debt Collectors Try to Repossess Man’s Car While He’s Deployed in Afghanistan

Comments 2 Comments

“Around 3 a.m., I heard the truck in the driveway, and when I looked out the window, I thought someone was stealing his car,” Carolyn said. “I woke my mother and my sister and started to the door. That’s when we heard pounding on the front door. It was so incredibly scary.”

Soldiers fighting overseas aren’t supposed to face a financial war at home. The Servicemembers Civil Relief Act, which has its roots in the Civil War, is supposed to prevent this kind of thing. But it doesn’t always work that way.

Carolyn, a reader from Connecticut, had a harrowing experience a couple of years ago when her brother was in Afghanistan.

“One of the men was standing at the door, the other was still in the driveway getting ready to hook up my brother’s car to the tow truck,” said Carolyn, from Connecticut. She asked that her family’s identity be protected. “They were both wearing badges on chains and presented themselves as law enforcement. They wouldn’t tell us which repo company they worked for.”

Needless to say, the repo company and bank involved didn’t have a court order permitting the repossession – that’s one of the requirements of the Servicemembers Civil Relief Act. Banks don’t want to go to court to before repossessing a car, in part because judges can force the bank taking the car to return some of the payments made by the soldier. So they often just show up in the middle of the night instead.

“They had no paperwork to show he was behind enough in his payments to warrant repossession. The truck itself was nondescript. There was nothing on it that showed what company they worked for. They refused to tell us their names and refused to show us any identification… They hooked the car up. They still wouldn’t tell us who they were or where they were going, and left without giving us paperwork or even a phone number.”

You don’t want women and men fighting overseas to be worried about fighting for their rights stateside. So the Servicemembers Civil Relief Act provides some essential protections to active duty military. The law insulates provides soldiers with special protections from foreclosure, garnishments, evictions, and all manner of judgments while they are serving their country. Theoretically, that helps soldiers focus on the task at hand. Not in Carolyn’s brother John’s case.

The car was critical for family transportation. Their other family car had recently broken down, so the loss of John’s car left them stranded. And, for the moment, with no idea where the car might be. There was only one way forward: To contact John in Afghanistan.

“My mother called John’s rear detachment to see if there was any way someone could get a hold of John so he could make some phone calls when he was able. Nobody had power of attorney so the only person who could fix this was John. They were able to pull him out of the field and he went straight to JAG (Judge Advocate General’s office) because he didn’t know what to do either. As far as he knew he had set up automatic payments. JAG told him what to do and he was able to get a hold of (the auto lender)… The finance company accepted the back payments from us since John still had to get in touch with his bank and find out why the automatic payment wasn’t working. (The bank) contacted the repo company who then contacted my mother.”

The repo firm said they would deliver the car back to the family. But even then, the episode wasn’t over. There was still arguing ahead.

“They said they would be there at 8 p.m., but didn’t show up until 10:30 p.m. He was just as rude and nasty as the last time he was there… He wanted my mother to sign some paperwork that said she was taking responsibility for the tow. She refused because he broke federal law by repossessing John’s car. He refused to unhook the car unless she signed the paperwork. So, she called the police and he refused to speak to the police. He called his boss and he told her it was company policy. “

After another round of negotiation, the repo driver agreed to unhook the car, but said he would mail the paperwork later. Instead, there was a special delivery.

“Later that night our mailbox, which was mounted on a post with three other mailboxes ours being second from the left, was broken off the post and thrown into the bushes. We still don’t know the name of the repo company or the men we dealt with.”

Carolyn and her family had very little understanding of their rights on that night in 2009 — she’s since researched the SCRA extensively. Debt collectors and repo men often count on the element of surprise to handle their assignments.

“I think had they not shown up in the middle of the night we would have been more clear-headed and his car would have never left the driveway. After the whole thing we spent a good amount of time researching what we should have done.”

Violations of the SCRA are common. In one case, a Bank of America subsidiary agreed to pay $39 million in restitution for soldiers whose homes were allegedly illegally foreclosed upon. Another involving Sallie Mae saw servicemembers allegedly overcharged for student loan interest. And Capital One also has settled a lawsuit over a series of alleged loan product violations including car repossession without court orders.

“Every day, our brave men and women in uniform make tremendous sacrifices to protect the American people from a range of global threats – and my colleagues and I are determined to ensure that they receive our strongest support here at home,” said Attorney General Eric Holder in announcing the settlement.

Anthony DeWitt, a Missouri-based lawyer who often represents debtors in collections cases, said it’s important for active duty military members to know their rights and share the information with family. The law only protects soldiers who know enough to invoke them.

“The Soldiers and Sailors Civil Relief Act is still federal law, but has some holes,” he warned. Lenders who get soldiers to sign waivers, for example, can be subject to repossession with a court order. “(Repo agents) often wear badges to make you think they are acting within the law, but you can buy badges online for very little money. “

A car repossession can have a major negative impact on your credit score, causing more insult to injury when your car is actually taken. You can check your credit reports to see if your repossession has been reported to the bureaus (you can get free copies of your credit reports once a year) and you can see the impact late car payments or a repossession are having on your credit scores for free on Credit.com.

Consumer rights under the SCRA are extensive. For example, Judges hearing car repossession cases can also require the bank to make what’s called an “equity payment” – granting the difference between the value of the car and the balance of the debt to the car owner. The payment must be made before the car is repossessed.

And here’s a thought worth considering: Are the rights afforded active duty military simply rights that all consumers should enjoy?

More on Managing Debt:

Image: moodboard

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • KG

    Seriously, these arrangements should have been made before he left. It is quite easy to set up MAC payments. It is not illegal to repossess a car that has not been paid for. The military expects you to pay your debts just as a civilian is suppose to. I worked in collections for car loans and I know what it is like to work with military. The responsible one’s will make sure things are in order before they leave.

  • JC

    It’s totally false that banks have a hard time identifying whether or not the debtor is a servicemember. First of all, creditors have an affirmative obligation to verify the military status of all debtors, without exception, prior to taking legal action. Each and every summons and complaint must contain verification that to the best of the creditor’s knowledge the debtor is not protected by the SSCRA.

    And creditors have an easy to use tool with which to verify one’s military status. There is an online verification tool publicly available to identify anybody as protected by the Servicemembers Civil Relief Act. The problem is that banks are too negligent, stupid or lazy to bother taking five minutes to check.

    A POA would not have avoided the repo in the case the article referes to. Also, from experience, which JV10 obviously lacks, prior to deployment military personnel have literally hundreds of things to be concerned about. It’s relatively easy to overlook or simply not have time to visit JAG to get a POA.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team