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State of Illinois 90th General Assembly: HB3136




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American Government

State of Illinois 90th General Assembly
HB3136

House Sponsors:
LANG-MEYER.

Short description:
VEHICLE REPOSSESSION-PROCEDURE                                             

Synopsis of Bill as introduced:
        Amends the Illinois Vehicle Code in provisions regarding transfer      
   of title. Provides that after repossession, if the buyer has  paid  an      
   amount  equal  to  30%  or  more  of  the  deferred payment price, the      
   required 21 day notice shall include the amount of all  back  payments      
   and  late  charges owed, the amount due for the costs of repossession,      
   the total amount due to recover the vehicle,  the  address  where  the      
   buyer  may  bring  the  total  amount  due  to recover the repossessed      
   vehicle, and a statement that the buyer may not  have  any  rights  to      
   recover  the  repossessed vehicle after the expiration of 21 days from      
   the date of the notice.  Amends the Illinois Fairness in  Lending  Act      
   and  the  Motor  Vehicle Retail Installment Sales Act to remove notice      
   requirements after repossession when the buyer has paid 30% or more of      
   the  deferred  payment  price,  and  instead  reference   the   notice      
   requirement in the Illinois Vehicle Code.  Effective immediately.           
 
Last action on Bill: SESSION SINE DIE

   Last action date: 99-01-12

           Location: House

 Amendments to Bill: AMENDMENTS ADOPTED: HOUSE -   0     SENATE -   0


Full Text


90_HB3136

      625 ILCS 5/3-114          from Ch. 95 1/2, par. 3-114
      815 ILCS 120/6            from Ch. 17, par. 856
      815 ILCS 375/20           from Ch. 121 1/2, par. 580
          Amends the Illinois Vehicle Code in provisions  regarding
      transfer  of  title. Provides that after repossession, if the
      buyer has paid an amount equal to 30% or more of the deferred
      payment price, the required 21 day notice shall  include  the
      amount of all back payments and late charges owed, the amount
      due  for  the  costs of repossession, the total amount due to
      recover the vehicle, the address where the  buyer  may  bring
      the  total amount due to recover the repossessed vehicle, and
      a statement that the buyer may not have any rights to recover
      the repossessed vehicle after the expiration of 21 days  from
      the  date  of  the  notice.   Amends the Illinois Fairness in
      Lending Act and the Motor Vehicle  Retail  Installment  Sales
      Act to remove notice requirements after repossession when the
      buyer has paid 30% or more of the deferred payment price, and
      instead  reference  the  notice  requirement  in the Illinois
      Vehicle Code.  Effective immediately.
                                                     LRB9010887SMdv
                                               LRB9010887SMdv
 1        AN ACT regarding vehicle repossession.
 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:
 4        Section  5.   The  Illinois  Vehicle  Code  is amended by
 5    changing Section 3-114 as follows:
 6        (625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
 7        Sec. 3-114.  Transfer by operation of law.
 8        (a)  If the interest of an owner in a vehicle  passes  to
 9    another  other  than  by  voluntary  transfer, the transferee
10    shall, except as provided in paragraph (b), promptly mail  or
11    deliver  within  20  days  to the Secretary of State the last
12    certificate of title, if available, proof  of  the  transfer,
13    and  his  application  for  a new certificate in the form the
14    Secretary of State prescribes. It shall be unlawful  for  any
15    person  having  possession  of  a  certificate of title for a
16    motor vehicle, semi-trailer, or house car by  reason  of  his
17    having  a  lien  or  encumbrance  on such vehicle, to fail or
18    refuse to deliver such certificate to  the  owner,  upon  the
19    satisfaction   or  discharge  of  the  lien  or  encumbrance,
20    indicated upon such certificate of title.
21        (b)  If the interest of an owner in a vehicle  passes  to
22    another  under the provisions of the Small Estates provisions
23    of the Probate Act of 1975 the transferee shall promptly mail
24    or deliver to the Secretary of State, within  120  days,  the
25    last  certificate  of  title, if available, the documentation
26    required under the provisions of the Probate Act of 1975, and
27    an application for certificate of  title.  The  Small  Estate
28    Affidavit  form shall be furnished by the Secretary of State.
29    The transfer may be to the transferee or to  the  nominee  of
30    the transferee.
31        (c)  If  the  interest of an owner in a vehicle passes to
                            -2-                LRB9010887SMdv
 1    another under other provisions of the Probate Act of 1975, as
 2    amended, and the transfer is  made  by  a  representative  or
 3    guardian,  such  transferee shall promptly mail or deliver to
 4    the Secretary of State, the last  certificate  of  title,  if
 5    available,  and  a certified copy of the letters of office or
 6    guardianship, and an application for  certificate  of  title.
 7    Such  application  shall be made before the estate is closed.
 8    The transfer may be to the transferee or to  the  nominee  of
 9    the transferee.
10        (d)  If  the interest of an owner in joint tenancy passes
11    to  the  other  joint  tenant  with  survivorship  rights  as
12    provided by  law,  the  transferee  shall  promptly  mail  or
13    deliver  to  the  Secretary of State, the last certificate of
14    title, if available, proof of death of the one  joint  tenant
15    and  survivorship  of  the  surviving  joint  tenant,  and an
16    application for certificate of title. Such application  shall
17    be  made within 120 days after the death of the joint tenant.
18    The transfer may be to the transferee or to  the  nominee  of
19    the transferee.
20        (e)  The  Secretary  of State shall transfer a decedent's
21    vehicle title to any legatee, representative or heir  of  the
22    decedent who submits to the Secretary a death certificate and
23    an  affidavit  by  an  attorney  at  law  on  the  letterhead
24    stationery   of  the attorney at law stating the facts of the
25    transfer.
26        (f)  In all cases wherein a lienholder has repossessed  a
27    vehicle,  after  the original 21 day notice to the debtor has
28    been fulfilled, the lienholder shall within 20 days  make  an
29    application  to  the  Secretary of State for a certificate of
30    title, a salvage certificate or a junking certificate, as set
31    forth in this Code. In all cases, however, the  Secretary  of
32    State  shall  not  issue  a  certificate  of title, a salvage
33    certificate or  a  junking  certificate  to  such  lienholder
34    unless the person from whom such vehicle has been repossessed
                            -3-                LRB9010887SMdv
 1    is  shown  to  be  the  last  registered  owner of such motor
 2    vehicle and such lienholder establishes to  the  satisfaction
 3    of  the  Secretary  of  State  that  he  is  entitled to such
 4    certificate  of  title,  salvage   certificate   or   junking
 5    certificate. The Secretary of State shall provide by rule for
 6    the  standards  to  be  followed  by a lienholder in order to
 7    obtain a certificate of title for a repossessed vehicle.
 8        If the buyer has paid an amount equal to 30% or  more  of
 9    the  deferred  payment price at the time of repossession, the
10    21 day notice shall include the  following  information:  (i)
11    the  amount  of  all  back payments owed that, if paid, would
12    make the buyer current on the loan, (ii) the  amount  of  any
13    late  charges  due,  (iii)  the  amount  due for the costs of
14    repossession, (iv)  the  total  amount  due  to  recover  the
15    repossessed  vehicle,  (v)  the  address  where the buyer may
16    bring cash, a certified check, or money order for  the  total
17    amount  due  to  recover  the repossessed vehicle, and (vi) a
18    statement that the buyer may not have any rights  to  recover
19    the  repossessed vehicle after the expiration of 21 days from
20    the date of the notice.
21        (g)  A  person  holding  a  certificate  of  title  whose
22    interest in the vehicle has been extinguished or  transferred
23    other  than  by  voluntary transfer shall mail or deliver the
24    certificate, within 20 days upon request of the Secretary  of
25    State.  The  delivery  of  the  certificate  pursuant  to the
26    request of the Secretary of State does not affect the  rights
27    of the person surrendering the certificate, and the action of
28    the  Secretary of State in issuing a new certificate of title
29    as provided herein is not conclusive upon the  rights  of  an
30    owner or lienholder named in the old certificate.
31        (h)  The  Secretary  of  State may decline to process any
32    application for a  transfer  of  an  interest  in  a  vehicle
33    hereunder  if  any  fees or taxes due under this Act from the
34    transferor  or  the  transferee  have  not  been  paid   upon
                            -4-                LRB9010887SMdv
 1    reasonable notice and demand.
 2        (i)  The  Secretary of State shall not be held civilly or
 3    criminally  liable  to  any  person  because  any   purported
 4    transferor  may not have had the power or authority to make a
 5    transfer  of  any  interest  in  any  vehicle  or  because  a
 6    certificate of title issued in error is subsequently used  to
 7    commit a fraudulent act.
 8    (Source: P.A. 90-212, eff. 1-1-98.)
 9        Section  10.   The  Illinois  Fairness  in Lending Act is
10    amended by changing Section 6 as follows:
11        (815 ILCS 120/6) (from Ch. 17, par. 856)
12        Sec. 6. Where  a  financial  institution,  other  than  a
13    credit  union,  as  defined  in  Section  1.1 of the Illinois
14    Credit Union Act, as now or hereafter amended, repossesses  a
15    motor  vehicle  that  was  used as a collateral and  which is
16    used  primarily  for  the  borrower's  personal,  family   or
17    household   purposes,   and  the  borrower  at  the  time  of
18    repossession has paid an amount equal to 30% or more  of  the
19    total  of  payments due, the borrower may, within 21 15 days,
20    redeem the motor vehicle from the  financial  institution  by
21    tendering:
22        (a)  the  total  of  all  unpaid  amounts,  including any
23    unpaid  delinquency   or   deferral   charges   due   without
24    acceleration, and
25        (b)  performance necessary to cure any default other than
26    nonpayment of the amounts due; and
27        (c)  any   reasonable   cost  or  fees  incurred  by  the
28    financial institution in the retaking of the goods.
29    Tender of payment and performance pursuant  to  this  Section
30    restores  to the borrower his rights under the loan as though
31    no default had occurred. The borrower has a right  to  redeem
32    the collateral from the financial institution only once under
                            -5-                LRB9010887SMdv
 1    this Section. The financial institution may, in the financial
 2    institution's sole discretion, extend the period during which
 3    the  borrower may redeem the collateral beyond the 21 15 days
 4    allowed under this  Section,  and  the  extension  shall  not
 5    subject   the  financial  institution  to  liability  to  the
 6    borrower under the laws of this State.
 7        If the buyer has paid an amount equal to 30% or  more  of
 8    the  deferred  payment price at the time or repossession, the
 9    financial  institution  must  give  written  notice  to   the
10    borrower,  pursuant  to Section 3-114 of the Illinois Vehicle
11    Code within 3 days of the  repossession,  of  the  borrower's
12    right  to redeem the collateral pursuant to this Section. The
13    written notice shall be in substantially the following form:
14                 NOTICE OF RIGHT TO RECOVER VEHICLE
15        Your  vehicle  was  repossessed  on  (specify  date)  for
16    failure to make payments on the loan (or other reason).
17        Under Illinois law, because you have paid at least 30% of
18    the loan before repossession, you may  be  able  to  get  the
19    vehicle  back.  You  have the right to recover the vehicle if
20    you  do  the  following  within  15  days  of  the  date   of
21    repossession:
22        1.   Make  payment of all back payments so
23             that you are current on the loan.       $...........
24        2.   Pay any late charge due.                $...........
25        3.   Pay the costs of repossession.          $...........
26             Total Amount Now Due                    $...........
27        Bring cash, a certified check  or  money  order  for  the
28    total  amount  now  due  that  is  listed above to our office
29    located at (specify address) by (specify date)  to  get  your
30    vehicle back.
31    (Source: P.A. 90-343, eff. 8-8-97.)
32        Section  15.   The Motor Vehicle Retail Installment Sales
33    Act is amended by changing Section 20 as follows:
                            -6-                LRB9010887SMdv
 1        (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
 2        Sec. 20.  Unless  otherwise  limited  by  this  Act,  the
 3    parties  shall  have  the  rights  and  remedies  provided in
 4    Article 9 of the Uniform  Commercial  Code  with  respect  to
 5    default   and,   disposition,   and  recovery  redemption  of
 6    collateral.
 7        If the buyer has paid an amount equal to 60% or  more  of
 8    the  deferred  payment price at the time of his default under
 9    the contract and if the buyer, at the request of  the  holder
10    and  without  legal  proceedings, surrenders the goods to the
11    holder in ordinary condition and free from malicious  damage,
12    the  holder  must, within a period of 5 days from the date of
13    receipt of the goods at his place of business,  elect  either
14    (a)  to  retain  the goods and release the buyer from further
15    obligation under the contract, or (b) to return the goods  to
16    the buyer at the holder's expense and be limited to an action
17    to recover the balance of the indebtedness.
18        If  the  buyer has paid an amount equal to 30% or more of
19    the deferred payment price at the time of  repossession,  the
20    buyer  shall  have  the  right  to reinstate the contract and
21    recover the collateral from the holder within 21 15 days from
22    the date of repossession by tendering (a)  the total  of  all
23    unpaid  amounts, including any unpaid delinquency or deferral
24    charges due at the time of tender, without acceleration,  and
25    (b)  performance  necessary  to  cure  any default other than
26    nonpayment of the amounts due; and (c) any reasonable cost or
27    fees incurred by the holder in the  retaking  of  the  goods.
28    Tender  of  payment  and performance pursuant to this Section
29    restores to the buyer his rights under the contract as though
30    no default had occurred.  The buyer has a right to  reinstate
31    the  contract and recover the collateral from the holder only
32    once under this Section. The holder may, in the holder's sole
33    discretion, extend the period  during  which  the  buyer  may
34    reinstate  the  contract  and  recover  redeem the collateral
                            -7-                LRB9010887SMdv
 1    beyond the 21 15 days allowed under  this  Section,  and  the
 2    extension  shall  not  subject the holder to liability to the
 3    buyer under the laws of this State. If the buyer has paid  an
 4    amount  equal to 30% or more of the deferred payment price at
 5    the time or repossession, the holder must give written notice
 6    to the buyer  pursuant  to  Section  3-114  of  the  Illinois
 7    Vehicle Code.
 8        The  holder must give written notice to the buyer, within
 9    3 days of the repossession, of the buyer's right to reinstate
10    the contract and recover  the  collateral  pursuant  to  this
11    Section.   The  written  notice shall be in substantially the
12    following form:
13                 NOTICE OF RIGHT TO RECOVER VEHICLE
14        Your  vehicle  was  repossessed  on  (specify  date)  for
15    failure to make payments on the contract (or other reason).
16        Under Illinois law, because you have paid at least 30% of
17    the deferred payment price before repossession,  you  may  be
18    able  to get the vehicle back.  You have the right to recover
19    the vehicle if you do the following within  15  days  of  the
20    date of repossession:
21        1.  Make payment of all back payments due as
22             of the date of this notice.                 $
23        2.  Pay any late charges due.                    $
24        3.  Pay the costs of repossession.               $
25               TOTAL  DUE  as  of  the  date of this
26                  notice                                 $
27        Plus any additional amounts which may become
28             due between the date of the notice  and
29             the date of reinstatement.                   $
30             AMOUNT NOW DUE
31        Bring  cash,  a  certified check or a money order for the
32    total amount plus any additional amounts which may become due
33    between  the  date  of  this  notice  and  the  date  of  the
34    reinstatement now due  that  is  to  our  office  located  at
                            -8-                LRB9010887SMdv
 1    (specify address) by (specify date) to get your vehicle back.
 2    (Source:  P.A.  90-343,  eff.  8-8-97;  90-437,  eff. 1-1-98;
 3    revised 12-1-97.)
 4        Section 99.  Effective date.  This Act takes effect  upon
 5    becoming law.


Bill Status

625 ILCS 5/3-114          from Ch. 95 1/2, par. 3-114                       
   815 ILCS 120/6            from Ch. 17, par. 856                             
   815 ILCS 375/20           from Ch. 121 1/2, par. 580                        

        Amends the Illinois Vehicle Code in provisions regarding transfer      
   of title. Provides that after repossession, if the buyer has  paid  an      
   amount  equal  to  30%  or  more  of  the  deferred payment price, the      
   required 21 day notice shall include the amount of all  back  payments      
   and  late  charges owed, the amount due for the costs of repossession,      
   the total amount due to recover the vehicle,  the  address  where  the      
   buyer  may  bring  the  total  amount  due  to recover the repossessed      
   vehicle, and a statement that the buyer may not  have  any  rights  to      
   recover  the  repossessed vehicle after the expiration of 21 days from      
   the date of the notice.  Amends the Illinois Fairness in  Lending  Act      
   and  the  Motor  Vehicle Retail Installment Sales Act to remove notice      
   requirements after repossession when the buyer has paid 30% or more of      
   the  deferred  payment  price,  and  instead  reference   the   notice      
   requirement in the Illinois Vehicle Code.  Effective immediately.           
   98-02-10  H  FIRST READING                                                  
   98-02-10  H  ADDED AS A JOINT SPONSOR                 MEYER                 
   98-02-10  H  REFERRED TO HOUSE RULES COMMITTEE        RULES                 
   99-01-12  H  SESSION SINE DIE                                               

   END OF INQUIRY 




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