Posted: 2007-03-09 01:14:00
UW Law School Professor Steve Meili, Director of the Consumer Law Litigation Clinic, and second-year student Kelly Anderson, a participant in the clinic, co-authored the cover story of the February 2007 Wisconsin Lawyer magazine, the official publication of the State Bar of Wisconsin.
In the article, "Wisconsin's New Automobile Repossession Law: Creditors in the Driver's Seat," Meili and Anderson describe the effect on consumers of the enactment in April 2006 of an amendment to the Wisconsin Consumer Act that allows creditors to declare consumers in default and repossess motor vehicles without court intervention.
"Amendments to the Wisconsin Consumer Act passed by the State Legislature last session have erased important protections for consumers who have defaulted on their auto loans," Meili says. "In the past, Wisconsin law prohibited so-called 'self-help repossession'; that is, creditors were required to sue the consumer and obtain a valid court judgment prior to repossessing a vehicle (unless the consumer voluntarily surrendered it). This process guaranteed that the consumer would have the opportunity to challenge the default, the underlying terms in the contract, or the creditor's collection practices."
Under the new law, once the creditor believes the consumer is in default, the creditor need only notify the consumer that if he or she wishes to challenge the default, the consumer must - within 15 days - ask to be sued by the creditor. If the consumer fails to make such a request, the creditor may proceed with the repossession without a court judgment.
"Because it is unlikely that any consumer will ask to be sued for anything," Meili says, "Wisconsin is likely to see a steep increase in repossessions without legal process."