The Basics of Repossession
What is a repossession? Why and when will I get repossessed?
A repossession is where a creditor seizes a specific property or asset of the debtor (you), when he or she fails to reach the agreed terms of the repayment contract or if the loan obligation is defaulted. The seizure of property is inevitable when monthly payments are missed, and would happen in a time frame of 2-3 months depending on the agreement you’ve signed with your creditor. The repossessed item will be used to pay for the remaining balance of what you owe.
What are the things that can be repossessed?
For as long as any of your property is signed as your collateral in a secured debt, you can expect for creditors to take action to get what is theirs. They can repossess your home, your car, items you’ve listed as collateral, and rent-to-own (appliances, electronics, and other furniture) property. It’s important to note that when creditors are allowed to repossess an item as noted in your contract with them, they do not have to rely on a judgement from court or give you a warning first before they seize your default assets.
Creditors cannot confiscate items that are not used as security or collateral, items that have been bought by your credit card because they’re considered unsecured debt, and items that are collateral for another contract.
Can you do anything to stop it?
Although the creditor has said that they will repossess your items the moment your payment is late, the best way to avoid this from happening is acting in advance. You can try any of these three options below to halt any surprise repossessions in your immediate future:
- Try striking another deal with your creditor. Who knows? Maybe if you offer a better arrangement, they might think again about repossessing your items. Hence, it’s best to have an excellent credit history to make sure you’ll make it easier for them to consider your request. They’re most likely to listen to your pleas if they see proof that you’ve been able to make decent payments before.
- Try offering a partial payment. Other creditors might send you a warning letter from their solicitor, and if this happens, call your creditor at once and offer this deal.
- When all else fails, bankruptcy may be your answer. You can try filing for a Chapter 13 bankruptcy which states that you – assuming that you have regular income, to propose a repayment plan to your creditors to pay off what you owe. The course of this installment plan would take mostly 3-5 years to complete.
- Don’t sign contract without reading the fine print. If you want to avoid the creditor from heading straight to your house to repossess your car or your home without any warning, you shouldn’t sign the contract that gives them the right to do so.
What the creditor can’t do?
Even if the creditor does not have to go to court to repossess your property, they are still bound by certain laws which aim to protect the debtor such as:
- They cannot use violence to repossess your property.
- They cannot break the peace, meaning they cannot provoke or excite others in the process.
What can I do after the repossession?
A few days after the repossession, you might receive a notice which explains why your property has been repossessed. They may also send you a notice on how to get your things back. Hence, if there’s something you must do is to act fast. Don’t wait around. Pick up the phone and contact your creditor. Prolonging the waiting will result in losing your property for good.
What if the creditors tell me that I have a deficiency balance?
Scenario: the repo men have finally repossessed, say, your vehicle. You’re almost feel relieved that you don’t have to worry about the debt anymore, despite the loss of your dream car—but wait! Your creditor is still demanding that you pay your deficiency balance. Do you have to pay off everything even when you have nothing left? Sadly, the answer is yes. Considering that the item that was repossessed was used, you can expect that the creditors would sell it for a much lower price to be able to sell it. Since they sold it for a lower price, it just so happens that the profit or the repossession sale will not be enough to pay off the balance of your debt.
How can I pay off my repossession balance when I have nothing left?
Auto Repossession Balance is an unsecured debt, hence, it can be settled with a debt relief program. Case in point, Financial Rescue LLC’s Debt Settlement Program accepts auto-repossession balances. You don’t have to let your remaining debt or deficiency balance make you feel like bankruptcy is your next step. After all, why would you have to slave yourself over paying off the remaining balance when they’ve already taken everything? With FRLLC’s debt settlement programs, your debts can be settled for less. Our expert team of negotiators will talk to your creditors to allow you the chance to settle your account for a lesser amount until the program is complete.
Does the threat of a repossession still terrify you?
Don’t let it! What you should do first is focus on paying off these secured debts to make sure that they won’t be able to get any of your properties. If you’re wondering how you can focus on these debts when you’re busy paying off your unsecured debts too—we’ll give you a quick solution: Financial Rescue LLC’s debt settlement programs! We’ve got the legal plans to help ease your burdens and give you the best debt relief you need.
To find out how we can help you, call 1-877-97-DEBTS for your first, free consultation. You wouldn’t want to miss the opportunity to pay-off your debts for a smaller amount, would you? You can say goodbye to the repo man nightmare and say hello to being debt free!