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90_SB1355
625 ILCS 5/3-114 from Ch. 95 1/2, par. 3-114
625 ILCS 5/3-117.1 from Ch. 95 1/2, par. 3-117.1
625 ILCS 5/3-104.1 rep.
Amends the Illinois Vehicle Code with regard to transfer
of title after repossession of a vehicle. Removes provision
requiring the lienholder to obtain a repossession title prior
to the sale of a repossessed vehicle, providing instead for a
21 day notice of redemption period to the owner after
repossession and the provision of an affidavit of defense to
the owner, who may file such affidavit to be received by the
lienholder within 21 days of the lienholder's notice of
repossession to halt the transfer of title. Provides that
upon reselling the vehicle the lienholder shall provide to
the purchaser the certificate of title, or security agreement
if the lienholder does not have the certificate of title, and
an affidavit of repossession, with which documents the
purchaser may obtain a new certificate of title. Amends the
Consumer Installment Loan Act, the Illinois Fairness in
Lending Act, and the Motor Vehicle Retail Installment Sales
Act to remove the procedural repossession provisions and
reference the transfer of title provisions in the Illinois
Vehicle Code. Makes other changes. Effective January 1,
1999.
LRB9008942SMdvA
LRB9008942SMdvA
1 AN ACT regarding the repossession of vehicles.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Consumer Installment Loan Act is amended
5 by changing Section 19.1 as follows:
6 (205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
7 Sec. 19.1. Where the licensee repossesses a motor vehicle
8 that was used as collateral and which is used primarily for
9 the obligor's personal, family or household purposes, the
10 licensee shall transfer the certificate of title pursuant to
11 Section 3-114 of the Illinois Vehicle Code and the obligor at
12 the time of repossession has paid an amount equal to 30% or
13 more of the total of payments due, the obligor may, within 15
14 days, reinstate the contract and recover the motor vehicle
15 from the licensee by tendering:
16 (a) the total of all unpaid amounts, including any
17 unpaid delinquency or deferral charges due, without
18 acceleration; and
19 (b) performance necessary to cure any default other than
20 nonpayment of the amounts due; and
21 (c) any reasonable cost or fees incurred by the licensee
22 in the retaking of the goods. Tender of payment and
23 performance pursuant to this Section restores to the obligor
24 his rights under the loan as though no default had occurred.
25 The obligor has a right to reinstate the contract and recover
26 the collateral from the licensee only once under this
27 Section.
28 The licensee must give written notice to the obligor,
29 within 3 days of the repossession, of the obligor's right to
30 reinstate the contract and recover the collateral pursuant to
31 this Section. The Written notice shall be in substantially
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1 the following form:
2 NOTICE OF RIGHT TO RECOVER VEHICLE
3 Your car was repossessed on (specify date) for failure to
4 make payments on the loan (or other reason).
5 Under Illinois law, because you have paid at least 30% of
6 the loan before repossession, you may be able to get the car
7 back. To recover the car and reinstate the loan you must do
8 the following within 15 days of the date of repossession:
9 1. Make payment of all back payments as
10 of the date of this notice
11 . $...........
12 2. Pay any late charge due. $...........
13 3. Pay the costs of repossession. $...........
14 Total due as of the date of this
15 notice
16 plus any additional amounts which may become
17 due
18 between the date of the notice and the date of
19 reinstatement. $...........
20 Bring cash, a certified check or money order for the
21 total amount plus any amounts which may become due between
22 the date of the notice and the date of reinstatement to our
23 office located at (specify address) by (specify date) to get
24 your car back.
25 (Source: P.A. 90-437, eff. 1-1-98.)
26 Section 10. The Illinois Vehicle Code is amended by
27 changing Sections 3-114 and 3-117.1 as follows:
28 (625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
29 Sec. 3-114. Transfer by operation of law.
30 (a) If the interest of an owner in a vehicle passes to
31 another other than by voluntary transfer, the transferee
32 shall, except as provided in paragraph (b), promptly mail or
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1 deliver within 20 days to the Secretary of State the last
2 certificate of title, if available, proof of the transfer,
3 and his application for a new certificate in the form the
4 Secretary of State prescribes. It shall be unlawful for any
5 person having possession of a certificate of title for a
6 motor vehicle, semi-trailer, or house car by reason of his
7 having a lien or encumbrance on such vehicle, to fail or
8 refuse to deliver such certificate to the owner, upon the
9 satisfaction or discharge of the lien or encumbrance,
10 indicated upon such certificate of title.
11 (b) If the interest of an owner in a vehicle passes to
12 another under the provisions of the Small Estates provisions
13 of the Probate Act of 1975 the transferee shall promptly mail
14 or deliver to the Secretary of State, within 120 days, the
15 last certificate of title, if available, the documentation
16 required under the provisions of the Probate Act of 1975, and
17 an application for certificate of title. The Small Estate
18 Affidavit form shall be furnished by the Secretary of State.
19 The transfer may be to the transferee or to the nominee of
20 the transferee.
21 (c) If the interest of an owner in a vehicle passes to
22 another under other provisions of the Probate Act of 1975, as
23 amended, and the transfer is made by a representative or
24 guardian, such transferee shall promptly mail or deliver to
25 the Secretary of State, the last certificate of title, if
26 available, and a certified copy of the letters of office or
27 guardianship, and an application for certificate of title.
28 Such application shall be made before the estate is closed.
29 The transfer may be to the transferee or to the nominee of
30 the transferee.
31 (d) If the interest of an owner in joint tenancy passes
32 to the other joint tenant with survivorship rights as
33 provided by law, the transferee shall promptly mail or
34 deliver to the Secretary of State, the last certificate of
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1 title, if available, proof of death of the one joint tenant
2 and survivorship of the surviving joint tenant, and an
3 application for certificate of title. Such application shall
4 be made within 120 days after the death of the joint tenant.
5 The transfer may be to the transferee or to the nominee of
6 the transferee.
7 (e) The Secretary of State shall transfer a decedent's
8 vehicle title to any legatee, representative or heir of the
9 decedent who submits to the Secretary a death certificate and
10 an affidavit by an attorney at law on the letterhead
11 stationery of the attorney at law stating the facts of the
12 transfer.
13 (f) In all cases wherein a lienholder has repossessed a
14 vehicle by other than judicial process and holds it for
15 resale under a security agreement, and the owner of record
16 has executed an assignment of the existing certificate of
17 title, the lienholder may proceed to sell or otherwise
18 dispose of the vehicle as authorized under the Uniform
19 Commercial Code. Upon selling the vehicle to another person,
20 the lienholder shall promptly mail or deliver to the
21 purchaser as transferee the existing certificate of title for
22 the repossessed vehicle, reflecting the release of the
23 lienholder's security interest in the vehicle and the owner's
24 assignment. The application for a certificate of title made
25 by the purchaser shall comply with subsection (a) of Section
26 3-104 and be accompanied by the existing certificate of title
27 for the repossessed vehicle.
28 (f-5) In all cases wherein a lienholder has repossessed
29 a vehicle by other than judicial process and holds it for
30 resale under a security agreement, and the owner of record
31 has not executed an assignment of the existing certificate of
32 title, the lienholder shall comply with the following
33 provisions:
34 (1) Prior to sale, the lienholder shall deliver or
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1 mail to the owner at the owner's last known address and
2 to any other lienholder of record, a notice of redemption
3 setting forth (i) the name of the owner of record, (ii) a
4 description of the vehicle subject to the lien sufficient
5 to identify it, (iii) the right of the owner to redeem
6 the vehicle, (iv) the lienholder's intent to sell or
7 otherwise dispose of the vehicle after the expiration of
8 21 days from the date of mailing or delivery of the
9 notice, and (v) the name, address, and telephone number
10 of the lienholder from whom the vehicle may be redeemed
11 under Section 9-506 of the Uniform Commercial Code. At
12 the lienholder's option, this notice may be made a part
13 of the notification of sale or other disposition required
14 under subsection (3) of Section 9-504 of the Uniform
15 Commercial Code.
16 (2) With respect to the repossession of a vehicle
17 used primarily for personal, family, or household
18 purposes, the lienholder shall also deliver or mail to
19 the owner at the owner's last known address an affidavit
20 of defense. The affidavit shall accompany the notice
21 required in subdivision (f-5)(1) of this Section. The
22 affidavit shall (i) identify the lienholder, owner, and
23 the vehicle; (ii) provide space for the owner to state
24 the defense claimed by the owner; and (iii) include an
25 acknowledgment by the owner that the owner may be liable
26 to the lienholder for fees, charges, and costs incurred
27 by the lienholder in establishing the insufficiency or
28 invalidity of the owner's defense. To stop the transfer
29 of title, the affidavit must be received by the
30 lienholder no later than 21 days after the date of
31 mailing or delivery of the notice required in subdivision
32 (f-5)(1) of this Section. If the lienholder receives the
33 affidavit from the owner in a timely manner, the
34 lienholder must apply to a court of competent
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1 jurisdiction to determine if the lienholder is entitled
2 to possession of the vehicle.
3 (3) Upon selling the vehicle to another person, the
4 lienholder shall promptly mail or deliver to the
5 purchaser as transferee (i) the existing certificate of
6 title for the repossessed vehicle, reflecting the release
7 of the lienholder's security interest in the vehicle; and
8 (ii) an affidavit of repossession made by or on behalf of
9 the lienholder which provides the following information:
10 that the vehicle was repossessed, a description of the
11 vehicle sufficient to identify it, whether the vehicle
12 has been damaged in excess of 33 1/3% of its fair market
13 value as required under subdivision (b)(3) of Section
14 3-117.1, that the owner and any other lienholder of
15 record were given the notice required in subdivision
16 (f-5)(1) of this Section, that the owner of record was
17 given the affidavit of defense required in subdivision
18 (f-5)(2) of this Section, that the interest of the owner
19 was lawfully terminated or sold pursuant to the terms of
20 the security agreement, and the purchaser's name and
21 address.
22 (4) The application for a certificate of title made
23 by the purchaser shall comply with subsection (a) of
24 Section 3-104 and be accompanied by the affidavit of
25 repossession furnished by the lienholder and the existing
26 certificate of title for the repossessed vehicle. In the
27 event the lienholder does not hold the certificate of
28 title for the repossessed vehicle, the lienholder shall
29 provide to the purchaser in lieu thereof a copy of the
30 security agreement, which the purchaser shall submit with
31 the purchaser's application for a new certificate of
32 title. The lienholder need not complete any assignment
33 of the existing certificate of title.
34 (5) Neither the lienholder nor the owner shall file
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1 with the Office of the Secretary of State the notice or
2 affidavit of defense respectively described in
3 subdivision (f-5)(1) and (f-5)(2) of this Section. The
4 Office of the Secretary of State shall not determine the
5 merits of an owner's affidavit of defense, nor consider
6 any allegations or assertions regarding the validity or
7 invalidity of a lienholder's claim to the vehicle or an
8 owner's asserted defenses to the repossession action.
9 (6) If applying for a salvage certificate or a
10 junking certificate, after the original 21 day notice to
11 the debtor has been fulfilled, the lienholder shall
12 within 20 days make an application to the Secretary of
13 State for a certificate of title, a salvage certificate
14 or a junking certificate, as set forth in this Code. In
15 all cases, however, the Secretary of State shall not
16 issue a certificate of title to the purchaser or, a
17 salvage certificate or a junking certificate to such
18 lienholder unless the person from whom such vehicle has
19 been repossessed is shown to be the last registered owner
20 of such motor vehicle and such purchaser or lienholder
21 establishes to the satisfaction of the Secretary of State
22 that he is entitled to such certificate of title, salvage
23 certificate or junking certificate. The Secretary of
24 State may shall provide by rule for the standards to be
25 followed by a purchaser or lienholder in order to obtain
26 a certificate of title, a salvage certificate, or junking
27 certificate for a repossessed vehicle.
28 (f-7) In all cases wherein a lienholder has repossessed
29 a vehicle by judicial process and holds it for resale under a
30 security agreement, order for replevin, or other court order
31 establishing the lienholder's right to possession of the
32 vehicle, the lienholder may proceed to sell or otherwise
33 dispose of the vehicle as authorized under the Uniform
34 Commercial Code or the court order. Upon selling the vehicle
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1 to another person, the lienholder shall promptly mail or
2 deliver to the purchaser as transferee (i) the existing
3 certificate of title for the repossessed vehicle reflecting
4 the release of the lienholder's security interest in the
5 vehicle; (ii) a certified copy of the court order; and (iii)
6 a bill of sale identifying the new owner's name and address
7 and the year, make, model, and vehicle identification number
8 of the vehicle. In the event the lienholder does not hold
9 the certificate of title for the repossessed vehicle, the
10 lienholder shall provide to the purchaser in lieu thereof a
11 copy of the security agreement, which the purchaser shall
12 submit with the purchaser's application for a new certificate
13 of title. The lienholder need not complete any assignment of
14 the existing certificate of title.
15 (g) A person holding a certificate of title whose
16 interest in the vehicle has been extinguished or transferred
17 other than by voluntary transfer shall mail or deliver the
18 certificate, within 20 days upon request of the Secretary of
19 State. The delivery of the certificate pursuant to the
20 request of the Secretary of State does not affect the rights
21 of the person surrendering the certificate, and the action of
22 the Secretary of State in issuing a new certificate of title
23 as provided herein is not conclusive upon the rights of an
24 owner or lienholder named in the old certificate.
25 (h) The Secretary of State may decline to process any
26 application for a transfer of an interest in a vehicle
27 hereunder if any fees or taxes due under this Act from the
28 transferor or the transferee have not been paid upon
29 reasonable notice and demand.
30 (i) The Secretary of State shall not be held civilly or
31 criminally liable to any person because any purported
32 transferor may not have had the power or authority to make a
33 transfer of any interest in any vehicle or because a
34 certificate of title issued in error is subsequently used to
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1 commit a fraudulent act.
2 (Source: P.A. 90-212, eff. 1-1-98.)
3 (625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
4 Sec. 3-117.1. When junking certificates or salvage
5 certificates must be obtained.
6 (a) Except as provided in Chapter 4 of this Code, a
7 person who possesses a junk vehicle shall within 15 days
8 cause the certificate of title, salvage certificate,
9 certificate of purchase, or a similarly acceptable out of
10 state document of ownership to be surrendered to the
11 Secretary of State along with an application for a junking
12 certificate, except as provided in Section 3-117.2, whereupon
13 the Secretary of State shall issue to such a person a junking
14 certificate, which shall authorize the holder thereof to
15 possess, transport, or, by an endorsement, transfer ownership
16 in such junked vehicle, and a certificate of title shall not
17 again be issued for such vehicle.
18 A licensee who possesses a junk vehicle and a Certificate
19 of Title, Salvage Certificate, Certificate of Purchase, or a
20 similarly acceptable out-of-state document of ownership for
21 such junk vehicle, may transport the junk vehicle to another
22 licensee prior to applying for or obtaining a junking
23 certificate, by executing a uniform invoice. The licensee
24 transferor shall furnish a copy of the uniform invoice to the
25 licensee transferee at the time of transfer. In any case,
26 the licensee transferor shall apply for a junking certificate
27 in conformance with Section 3-117.1 of this Chapter. The
28 following information shall be contained on a uniform
29 invoice:
30 (1) The business name, address and dealer license
31 number of the person disposing of the vehicle, junk
32 vehicle or vehicle cowl;
33 (2) The name and address of the person acquiring
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1 the vehicle, junk vehicle or vehicle cowl, and if that
2 person is a dealer, the Illinois or out-of-state dealer
3 license number of that dealer;
4 (3) The date of the disposition of the vehicle,
5 junk vehicle or vehicle cowl;
6 (4) The year, make, model, color and description of
7 each vehicle, junk vehicle or vehicle cowl disposed of by
8 such person;
9 (5) The manufacturer's vehicle identification
10 number, Secretary of State identification number or
11 Illinois Department of State Police number, for each
12 vehicle, junk vehicle or vehicle cowl part disposed of by
13 such person;
14 (6) The printed name and legible signature of the
15 person or agent disposing of the vehicle, junk vehicle or
16 vehicle cowl; and
17 (7) The printed name and legible signature of the
18 person accepting delivery of the vehicle, junk vehicle or
19 vehicle cowl.
20 The Secretary of State may certify a junking manifest in
21 a form prescribed by the Secretary of State that reflects
22 those vehicles for which junking certificates have been
23 applied or issued. A junking manifest may be issued to any
24 person and it shall constitute evidence of ownership for the
25 vehicle listed upon it. A junking manifest may be
26 transferred only to a person licensed under Section 5-301 of
27 this Code as a scrap processor. A junking manifest will
28 allow the transportation of those vehicles to a scrap
29 processor prior to receiving the junk certificate from the
30 Secretary of State.
31 (b) An application for a salvage certificate shall be
32 submitted to the Secretary of State in any of the following
33 situations:
34 (1) When an insurance company makes a payment of
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1 damages on a total loss claim for a vehicle, the
2 insurance company shall be deemed to be the owner of such
3 vehicle and the vehicle shall be considered to be salvage
4 except that ownership of a vehicle 9 model years of age
5 or older may, by agreement between the registered owner
6 and the insurance company, be retained by the registered
7 owner of such vehicle. The insurance company shall
8 promptly deliver or mail within 20 days the certificate
9 of title along with proper application and fee to the
10 Secretary of State, and a salvage certificate shall be
11 issued in the name of the insurance company. An insurer
12 making payment of damages on a total loss claim for the
13 theft of a vehicle may exchange the salvage certificate
14 for a certificate of title if the vehicle is recovered
15 without damage. In such a situation, the insurer shall
16 fill out and sign a form prescribed by the Secretary of
17 State which contains an affirmation under penalty of
18 perjury that the vehicle was recovered without damage and
19 the Secretary of State may, by rule or regulation,
20 require photographs to be submitted.
21 (2) When a vehicle the ownership of which has been
22 transferred to any person through a certificate of
23 purchase from acquisition of the vehicle at an auction,
24 other dispositions as set forth in Sections 4-208 and
25 4-209 of this Code, a lien arising under Section 18a-501
26 of this Code, or a public sale under the Abandoned Mobile
27 Home Act shall be deemed salvage or junk at the option of
28 the purchaser. The person acquiring such vehicle in such
29 manner shall promptly deliver or mail, within 20 days
30 after the acquisition of the vehicle, the certificate of
31 purchase, the proper application and fee, and, if the
32 vehicle is an abandoned mobile home under the Abandoned
33 Mobile Home Act, a certification from a local law
34 enforcement agency that the vehicle was purchased or
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1 acquired at a public sale under the Abandoned Mobile Home
2 Act to the Secretary of State and a salvage certificate
3 or junking certificate shall be issued in the name of
4 that person. The salvage certificate or junking
5 certificate issued by the Secretary of State under this
6 Section shall be free of any lien that existed against
7 the vehicle prior to the time the vehicle was acquired by
8 the applicant under this Code.
9 (3) A vehicle which has been repossessed by a
10 lienholder shall be considered to be salvage only when
11 the repossessed vehicle, on the date of repossession by
12 the lienholder, has sustained damage by collision, fire,
13 theft, rust corrosion, or other means so that the cost of
14 repairing such damage, including labor, would be greater
15 than 33 1/3% of its fair market value without such
16 damage. If the lienholder determines that such vehicle
17 is damaged in excess of 33 1/3% of such fair market
18 value, the lienholder shall, before sale, transfer or
19 assignment of the vehicle, make application for a salvage
20 certificate, and shall submit with such application the
21 proper fee and evidence of possession. If the facts
22 required to be shown in subsection (f) of Section 3-114
23 are satisfied, the Secretary of State shall issue a
24 salvage certificate in the name of the lienholder making
25 the application. In any case wherein the vehicle
26 repossessed is not damaged in excess of 33 1/3% of its
27 fair market value, the lienholder, shall comply with the
28 requirements of subsections (f), (f-5), and (f-7) of
29 Section 3-114, except that the affidavit of repossession
30 made by or on behalf of the lienholder after the original
31 21 day notice to the debtor has been fulfilled, shall
32 within 15 days make an application to the Secretary of
33 State for a certificate of title, submitting with such
34 application evidence of possession. The application
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1 shall also contain an affirmation under penalty of
2 perjury that the vehicle on the date of sale such
3 application for certificate of title is not damaged in
4 excess of 33 1/3% of its fair market value. If the facts
5 required to be shown in subsection (f) of Section 3-114
6 are satisfied, the Secretary of State shall issue a
7 certificate of title as set forth in Section 3-116 of
8 this Code. The Secretary of State may by rule or
9 regulation require photographs to be submitted.
10 (4) A vehicle which is a part of a fleet of more
11 than 5 commercial vehicles registered in this State or
12 any other state or registered proportionately among
13 several states shall be considered to be salvage when
14 such vehicle has sustained damage by collision, fire,
15 theft, rust, corrosion or similar means so that the cost
16 of repairing such damage, including labor, would be
17 greater than 33 1/3% of the fair market value of the
18 vehicle without such damage. If the owner of a fleet
19 vehicle desires to sell, transfer, or assign his interest
20 in such vehicle to a person within this State other than
21 an insurance company licensed to do business within this
22 State, and the owner determines that such vehicle, at the
23 time of the proposed sale, transfer or assignment is
24 damaged in excess of 33 1/3% of its fair market value,
25 the owner shall, before such sale, transfer or
26 assignment, make application for a salvage certificate.
27 The application shall contain with it evidence of
28 possession of the vehicle. If the fleet vehicle at the
29 time of its sale, transfer, or assignment is not damaged
30 in excess of 33 1/3% of its fair market value, the owner
31 shall so state in a written affirmation on a form
32 prescribed by the Secretary of State by rule or
33 regulation. The Secretary of State may by rule or
34 regulation require photographs to be submitted. Upon
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1 sale, transfer or assignment of the fleet vehicle the
2 owner shall mail the affirmation to the Secretary of
3 State.
4 (5) A vehicle that has been submerged in water to
5 the point that rising water has reached over the door
6 sill and has entered the passenger or trunk compartment
7 is a "flood vehicle". A flood vehicle shall be
8 considered to be salvage only if the vehicle has
9 sustained damage so that the cost of repairing the
10 damage, including labor, would be greater than 33 1/3% of
11 the fair market value of the vehicle without that damage.
12 The salvage certificate issued under this Section shall
13 indicate the word "flood", and the word "flood" shall be
14 conspicuously entered on subsequent titles for the
15 vehicle. A person who possesses or acquires a flood
16 vehicle that is not damaged in excess of 33 1/3% of its
17 fair market value shall make application for title in
18 accordance with Section 3-116 of this Code, designating
19 the vehicle as "flood" in a manner prescribed by the
20 Secretary of State. The certificate of title issued
21 shall indicate the word "flood", and the word "flood"
22 shall be conspicuously entered on subsequent titles for
23 the vehicle.
24 (c) Any person who without authority acquires, sells,
25 exchanges, gives away, transfers or destroys or offers to
26 acquire, sell, exchange, give away, transfer or destroy the
27 certificate of title to any vehicle which is a junk or
28 salvage vehicle shall be guilty of a Class 3 felony.
29 (d) Any person who knowingly fails to surrender to the
30 Secretary of State a certificate of title, salvage
31 certificate, certificate of purchase or a similarly
32 acceptable out-of-state document of ownership as required
33 under the provisions of this Section is guilty of a Class A
34 misdemeanor for a first offense and a Class 4 felony for a
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1 subsequent offense; except that a person licensed under this
2 Code who violates paragraph (5) of subsection (b) of this
3 Section is guilty of a business offense and shall be fined
4 not less than $1,000 nor more than $5,000 for a first offense
5 and is guilty of a Class 4 felony for a second or subsequent
6 violation.
7 (e) Any vehicle which is salvage or junk may not be
8 driven or operated on roads and highways within this State.
9 A violation of this subsection is a Class A misdemeanor. A
10 salvage vehicle displaying valid special plates issued under
11 Section 3-601(b) of this Code, which is being driven to or
12 from an inspection conducted under Section 3-308 of this
13 Code, is exempt from the provisions of this subsection. A
14 salvage vehicle for which a short term permit has been issued
15 under Section 3-307 of this Code is exempt from the
16 provisions of this subsection for the duration of the permit.
17 (Source: P.A. 88-516; 88-685, eff. 1-24-95; 89-669, eff.
18 1-1-97.)
19 (625 ILCS 5/3-104.1 rep.)
20 Section 15. The Illinois Vehicle Code is amended by
21 repealing Section 3-104.1.
22 Section 20. The Illinois Fairness in Lending Act is
23 amended by changing Section 6 as follows:
24 (815 ILCS 120/6) (from Ch. 17, par. 856)
25 Sec. 6. Where a financial institution, other than a
26 credit union, as defined in Section 1.1 of the Illinois
27 Credit Union Act, as now or hereafter amended, repossesses a
28 motor vehicle that was used as a collateral and which is
29 used primarily for the borrower's personal, family or
30 household purposes, the financial institution shall transfer
31 the certificate of title pursuant to Section 3-114 of the
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1 Illinois Vehicle Code and the borrower at the time of
2 repossession has paid an amount equal to 30% or more of the
3 total of payments due, the borrower may, within 15 days,
4 redeem the motor vehicle from the financial institution by
5 tendering:
6 (a) the total of all unpaid amounts, including any
7 unpaid delinquency or deferral charges due without
8 acceleration, and
9 (b) performance necessary to cure any default other than
10 nonpayment of the amounts due; and
11 (c) any reasonable cost or fees incurred by the
12 financial institution in the retaking of the goods.
13 Tender of payment and performance pursuant to this Section
14 restores to the borrower his rights under the loan as though
15 no default had occurred. The borrower has a right to redeem
16 the collateral from the financial institution only once under
17 this Section. The financial institution may, in the financial
18 institution's sole discretion, extend the period during which
19 the borrower may redeem the collateral beyond the 15 days
20 allowed under this Section, and the extension shall not
21 subject the financial institution to liability to the
22 borrower under the laws of this State.
23 The financial institution must give written notice to the
24 borrower, within 3 days of the repossession, of the
25 borrower's right to redeem the collateral pursuant to this
26 Section. The written notice shall be in substantially the
27 following form:
28 NOTICE OF RIGHT TO RECOVER VEHICLE
29 Your vehicle was repossessed on (specify date) for
30 failure to make payments on the loan (or other reason).
31 Under Illinois law, because you have paid at least 30% of
32 the loan before repossession, you may be able to get the
33 vehicle back. You have the right to recover the vehicle if
34 you do the following within 15 days of the date of
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1 repossession:
2 1. Make payment of all back payments so
3 that you are current on the loan. $...........
4 2. Pay any late charge due. $...........
5 3. Pay the costs of repossession. $...........
6 Total Amount Now Due $...........
7 Bring cash, a certified check or money order for the
8 total amount now due that is listed above to our office
9 located at (specify address) by (specify date) to get your
10 vehicle back.
11 (Source: P.A. 90-343, eff. 8-8-97.)
12 Section 25. The Motor Vehicle Retail Installment Sales
13 Act is amended by changing Section 20 as follows:
14 (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
15 Sec. 20. Unless otherwise limited by this Act, The
16 parties shall have the rights and remedies provided in
17 Article 9 of the Uniform Commercial Code with respect to
18 default and, disposition, and recovery redemption of
19 collateral. If the holder of a retail installment contract
20 repossesses a motor vehicle that was used as collateral, the
21 holder shall transfer the certificate of title pursuant to
22 Section 3-114 of the Illinois Vehicle Code.
23 If the buyer has paid an amount equal to 60% or more of
24 the deferred payment price at the time of his default under
25 the contract and if the buyer, at the request of the holder
26 and without legal proceedings, surrenders the goods to the
27 holder in ordinary condition and free from malicious damage,
28 the holder must, within a period of 5 days from the date of
29 receipt of the goods at his place of business, elect either
30 (a) to retain the goods and release the buyer from further
31 obligation under the contract, or (b) to return the goods to
32 the buyer at the holder's expense and be limited to an action
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1 to recover the balance of the indebtedness.
2 If the buyer has paid an amount equal to 30% or more of
3 the deferred payment price at the time of repossession, the
4 buyer shall have the right to reinstate the contract and
5 recover the collateral from the holder within 15 days from
6 the date of repossession by tendering (a) the total of all
7 unpaid amounts, including any unpaid delinquency or deferral
8 charges due at the time of tender, without acceleration, and
9 (b) performance necessary to cure any default other than
10 nonpayment of the amounts due; and (c) any reasonable cost or
11 fees incurred by the holder in the retaking of the goods.
12 Tender of payment and performance pursuant to this Section
13 restores to the buyer his rights under the contract as though
14 no default had occurred. The buyer has a right to reinstate
15 the contract and recover the collateral from the holder only
16 once under this Section. The holder may, in the holder's sole
17 discretion, extend the period during which the buyer may
18 redeem the collateral beyond the 15 days allowed under this
19 Section, and the extension shall not subject the holder to
20 liability to the buyer under the laws of this State.
21 The holder must give written notice to the buyer, within
22 3 days of the repossession, of the buyer's right to reinstate
23 the contract and recover the collateral pursuant to this
24 Section. The written notice shall be in substantially the
25 following form:
26 NOTICE OF RIGHT TO RECOVER VEHICLE
27 Your vehicle was repossessed on (specify date) for
28 failure to make payments on the contract (or other reason).
29 Under Illinois law, because you have paid at least 30% of
30 the deferred payment price before repossession, you may be
31 able to get the vehicle back. You have the right to recover
32 the vehicle if you do the following within 15 days of the
33 date of repossession:
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1 1. Make payment of all back payments due as
2 of the date of this notice. $
3 2. Pay any late charges due. $
4 3. Pay the costs of repossession. $
5 TOTAL DUE as of the date of this
6 notice: $
7 4. Plus any additional amounts which may
8 become due between the date of the
9 notice and the date of reinstatement. $
10 AMOUNT NOW DUE
11 Bring cash, a certified check or a money order for the
12 total amount plus any additional amounts which may become due
13 between the date of this notice and the date of the
14 reinstatement now due that is to our office located at
15 (specify address) by (specify date) to get your vehicle back.
16 (Source: P.A. 90-343, eff. 8-8-97; 90-437, eff. 1-1-98;
17 revised 12-1-97.)
18 Section 99. Effective date. This Act takes effect
19 January 1, 1999.