Unfortunately, the past few years of economic hardship has taught some of us far more than we ever wanted to know about repossession.
Many Americans have struggled to keep up with credit payments due to unemployment, rising interest rates or other financial difficulties. But the reality of losing the things we have worked for can be the worst.
Let’s dispel a little of the fear around the subject.
What Happens in a Repossession?
Anyone who falls behind on a loan payment that was secured by an asset – home, car, furniture, etc. – can be subject to having the asset repossessed.
The lender, mortgage holder or credit card company has the right to take the assets if you don’t make the payments you promised to.
How Does It Work?
First of all, realize that the lender does not want to repossess your property; it is a last resort action when they can no longer hope to receive payment from you.
They will make every effort to work with you on resuming payments. If that is not possible, they will notify you of the intent to repossess by a certain date.
Then ball is in your court.
The creditor will hire a company that specializes in repossession of property. Make no mistake, these folks know what they are doing.
“They can and will take the property
using the legal rights afforded to them.”
Many people who find themselves in this position choose to cooperate and voluntarily return the asset to the repossession company. This is actually a wise move, as it can often save money.
Any time a company has to resort to towing a car, breaking a lock or otherwise incurring cost to recover an asset, the cost is passed along to you.
If the property is in your home and you do not allow them access, the sheriff or local law enforcement agency gets involved.
This can also add expenses, which is passed along.
What’s the Best Action You Can Take?
The best course of action in this case is to cooperate fully. Hand over the keys rather than make them tow a car.
Open your house rather than wait for law enforcement. In the long run, it is in your best interest.
Of course, the way to avoid all of this is to negotiate with the creditor. As I said, they want to work with you.
Try suggesting smaller payments or a longer term. Be creative, and be genuine.
If you believe you will be able to make payments in the future, let them know and see if they will give you time.
Photo Source: www.lawcmc.com
BadCredit.org is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free for users, we receive advertising compensation from the financial products listed on this page. Along with key review factors, this compensation may impact how and where products appear on the page (including, for example, the order in which they appear). BadCredit.org does not include listings for all financial products.
Our Editorial Review Policy
Our site is committed to publishing independent, accurate content guided by strict editorial guidelines. Before articles and reviews are published on our site, they undergo a thorough review process performed by a team of independent editors and subject-matter experts to ensure the content’s accuracy, timeliness, and impartiality. Our editorial team is separate and independent of our site’s advertisers, and the opinions they express on our site are their own. To read more about our team members and their editorial backgrounds, please visit our site’s About page.