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