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Should You Send Post-Repossession Notices by Certified Mail?

By Michael W. Dunagan
TIADA General Counsel

Dealer Question:  Am I required by law to send post-repossession notice letters by certified mail?

Answer:  While there is no legal requirement of sending notices by certified mail, it is recommended to do so to establish proof that the notice was sent and when it was sent. Additionally, we recommend that a return postal receipt 
be requested.

The Texas Business and Commerce Code (which is the Texas version of the Uniform Commercial Code) requires that, absent a written waiver of notification signed by the debtor after default,  a secured creditor send “a reasonable authenticated notification of disposition…” after a repossession of collateral has taken place.

We have seen cases where debtors have challenged whether notices had in fact been sent. We have found that most judges will accept postal receipts (the green card returned to the sender) as valid proof of sending. Without such proof, the question is left to testimonial evidence to establish sending.

While the law requires “sending” notice to the last known address, it does not require proof that the notice was accepted or read. Whether the mail is signed for by the debtor, or refused, or simply ignored, there is direct proof of the required sending.

There are now some less-expensive ways of having out-going mail recorded by the post office so that a government record exists, if the cost of sending certified with a return receipt is too much.  

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