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A BILL TO BE ENTITLED
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AN ACT
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relating to the repossession of a motor vehicle after default on an |
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agreement. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle B, Title 4, Finance Code, is amended by |
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adding Chapter 355 to read as follows: |
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CHAPTER 355. REPOSSESSION OF MOTOR VEHICLE AFTER DEFAULT |
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Sec. 355.001. DEFINITION. In this chapter, "motor vehicle" |
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has the meaning assigned by Section 348.001. |
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Sec. 355.002. RESTRICTION ON COLLECTION OF DEFICIENCY |
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BALANCE AFTER REPOSSESSION SALE. (a) Notwithstanding any other |
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law, a lender or other person who repossesses a motor vehicle after |
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a default under a loan, lease, or other agreement and who sells the |
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vehicle to secure repayment of the debt is not entitled to collect |
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from the borrower any amount for a deficiency balance resulting |
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from the sale if the value of the vehicle is less than $2,000 unless |
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the borrower: |
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(1) damages the vehicle; or |
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(2) wrongfully fails, after default and demand, to |
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make the vehicle available to the lender or other person. |
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(b) For purposes of Subsection (a), the value of a motor |
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vehicle is the fair market value of the vehicle on the date of |
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repossession. |
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SECTION 2. The changes in law made by this Act apply only to |
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an agreement entered into on or after the effective date of this |
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Act. |
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SECTION 3. This Act takes effect September 1, 2021. |