• New Indiana Law Requires "Motor Vehicles Repossession Agent" to Furnish Sheriff with Certain Information in Connection with Repossession of a Motor Vehicle or Watercraft
  • July 2, 2009
  • Law Firm: Frost Brown Todd LLC - Office
  • Secured lenders should take note that, effective July 1, 2009, a new Indiana law (Senate Bill 174, enacted as IC 26-2-10) requires a "motor vehicle repossession agent" who intends to repossess, or has repossessed, a "motor vehicle" or watercraft to provide certain information to the Sheriff of the Indiana county in which the motor vehicle or watercraft is believed to be located (if not yet repossessed) or was located (if repossession has already occurred). Failure to provide the information to the Sheriff is made a criminal offense, a Class C infraction.

    Under IC 26-2-10, a "motor vehicle repossession agent" -- defined as any "person who physically repossesses a motor vehicle or watercraft on behalf of another person or on the person's own behalf…"-- must furnish the following information, if available, to the Sheriff in connection with a proposed or completed repossession of a motor vehicle or watercraft within that Sheriff's jurisdiction, either before repossession is made, or within two (2) hours thereafter:

    (1) The identify of the repossession company;

    (2) A description of the motor vehicle or watercraft;

    (3) The name and address of the person believed to be currently in possession, if repossession has not yet occurred, or believed to have been in possession when the item was seized, if repossession has occurred already; and

    (4) The address where the repossession agent believes the motor vehicle or watercraft will be found (if not yet repossessed), or at which it was actually found and repossessed.

    The purpose of this new law presumably is to avoid the Sheriff unnecessarily responding to a stolen vehicle or boat report filed by a borrower-owner who is not yet aware that his car or boat has been repossessed by the lender. However, the statute is not limited to consumer-type loans, and its definition of a "motor vehicle" (i.e., any "vehicle that is self propelled") appears broad enough to encompass certain types of motorized equipment that frequently may serve as collateral for commercial loans. Because the statute defines the word "repossess" simply to mean "to take possession of [a motor vehicle or watercraft] used as collateral…," it also is not clear if the above information must be furnished to the Sheriff only in connection with an involuntary repossession, or must be supplied even when the owner-debtor voluntarily relinquishes possession to the secured lender.

    Lenders doing business in Indiana who handle their own repossession efforts should implement procedures to ensure that, beginning July 1, 2009, the information listed in the statute is provided in a timely manner to the relevant sheriff's department whenever the lender has repossessed, or intends to repossess, items of collateral of the types covered by the statute. Because non-compliance with the statute is a criminal offense, lenders who use independent repossession companies may wish to contact their agents to confirm that they are aware of this new law and have procedures in place to comply with it when they are repossessing collateral on behalf of the lender.