| 1 | 1 | | 87R1954 JES-D |
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| 2 | 2 | | By: Walle H.B. No. 777 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the repossession of a motor vehicle after default on an |
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| 8 | 8 | | agreement. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subtitle B, Title 4, Finance Code, is amended by |
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| 11 | 11 | | adding Chapter 355 to read as follows: |
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| 12 | 12 | | CHAPTER 355. REPOSSESSION OF MOTOR VEHICLE AFTER DEFAULT |
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| 13 | 13 | | Sec. 355.001. DEFINITION. In this chapter, "motor vehicle" |
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| 14 | 14 | | has the meaning assigned by Section 348.001. |
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| 15 | 15 | | Sec. 355.002. RESTRICTION ON COLLECTION OF DEFICIENCY |
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| 16 | 16 | | BALANCE AFTER REPOSSESSION SALE. (a) Notwithstanding any other |
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| 17 | 17 | | law, a lender or other person who repossesses a motor vehicle after |
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| 18 | 18 | | a default under a loan, lease, or other agreement and who sells the |
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| 19 | 19 | | vehicle to secure repayment of the debt is not entitled to collect |
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| 20 | 20 | | from the borrower any amount for a deficiency balance resulting |
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| 21 | 21 | | from the sale if the value of the vehicle is less than $2,000 unless |
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| 22 | 22 | | the borrower: |
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| 23 | 23 | | (1) damages the vehicle; or |
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| 24 | 24 | | (2) wrongfully fails, after default and demand, to |
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| 25 | 25 | | make the vehicle available to the lender or other person. |
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| 26 | 26 | | (b) For purposes of Subsection (a), the value of a motor |
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| 27 | 27 | | vehicle is the fair market value of the vehicle on the date of |
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| 28 | 28 | | repossession. |
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| 29 | 29 | | SECTION 2. The changes in law made by this Act apply only to |
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| 30 | 30 | | an agreement entered into on or after the effective date of this |
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| 31 | 31 | | Act. |
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| 32 | 32 | | SECTION 3. This Act takes effect September 1, 2021. |
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