Property Repossession FAQ"s
Repossession 101-Consumer Rights and What You Should Know Repossession is a problem that affects a growing number of Americans every single day.
Cars are the most common type of items that are repossessed, but homes and other property are also at risk.
Any time that a consumer gets a secured loan and is required to offer collateral as a promise of repayment, repossession is a potential risk that people could face.
The following information will help you to better understand repossessions and what is involved in the entire process, but should not be taken as legal advice because it is for informational purposes only.
Lenders can repossess property even if the payments are being made on time.
Many people don't know this.
However, if the property is: - sold - damaged - stolen - uninsured It can be taken away without warning.
Additionally, if you have lost a job or had a change in financial status where the lender feels that repayment will not happen as it should, you can have your property repossessed.
Finally, if you refuse to let the creditor investigate the property or do what they need to do, you can be seen as 'in default'.
Depending on the contract, lenders might or might not have to let you know that they are coming for your property.
If your contract doesn't say anything different, lenders are required to let you know that you owe them full payment before they repossess anything that you own.
Most states have a 'right to cure' law that allows consumers a few weeks from the notice to repay their payments plus late fees.
Not all states have these laws, so make sure that you find out what you are working with.
Wisconsin and Louisiana prohibit lenders from repossessing property without a court order, so you might be able to buy a little time if you live in these states.
Any other state simply needs a defaulted loan and an order for repossession for it to be a legal process.
If a consumer realizes that they cannot repay a loan, they can voluntarily give up their property.
Most creditors will accept this as your way of keeping up your end of the deal and canceling the loan.
However, you are still required to pay the remaining balance unless you are told otherwise.
Some lenders won't accept voluntary repossessions or exchanges of collateral for the canceling of the balance.
If your property is seized and you cannot pay for it, the lender will auction the property.
Then, the amount that you owe is subtracted from the auction amount, and you will only have to pay the balance.
For example, if your car is seized and you owe $8,000 on it, it could only be auctioned for $3,000 to $4,000.
That means that you would still owe the lender $4,000 to $5,000 for the car, even though you didn't keep it.
That balance can be resolved through debt settlement, credit counseling, or even bankruptcy if you are so financially strapped that you have no other options.
You need to take the time to learn about your options and see which the lender is most satisfied with so that you can get the best results when attempting to resolve your repossession.
Here are some legal and illegal things that repossessions might involve.
First, most states require that the lender sends a 'right to cure' notice to the debtor before the repossession can occur.
Then, it is required to be done without creating a scene or without force.
However, it is very hard to pin down exactly how repossession should happen.
Here are some tips: Legal actions to repossess cars: - tricking or lying to consumers - hotwiring - duplicate keys - taking a vehicle from unlocked garages, open garages, carports, parking lots, or driveways Illegal repossession tactics (in most states): - breaking and entering - taking the vehicle after the time of repossession when someone has objected the order - using violence or abusive language If you object the repossession, they cannot take the vehicle at that time.
However, they can come back later that day while you are working or at night while you sleep and take the vehicle as long as there is no violence or force used.
Also, some lenders will seek a court order just to be safe.
In most cases, furniture or other property that you have in your home will not be repossessed like vehicles are.
Instead, you will be encouraged to return the items or to make payments to pay them off.
You should never return anything without a written agreement that leaves you owing $0 because you returned the property.
Once your property has been repossessed, you can get it back in most states as long as you pay back what is owed and any fees or costs that have since been incurred.
However, if you falsified information, hid the property to avoid it being repossessed, or if the property value has depreciated or the contract has been reinstated previously, you might not be able to get your property back because you have proven yourself to be unworthy of the loan.
Voluntary repossession makes your credit look slightly better because it shows that you were willing to face facts and deal with the situation.
Don't hide something or try to avoid repossession because it can cost you your car or other property for deliberately impeding the repossession order.
If your property is involuntarily repossessed, you will be more likely to have to pay a lot of fees and have less of a chance of getting your property back.
The good news is that if you have personal property in a vehicle that is being repossessed, you are entitled to it as long as it isn't attached to the vehicle.
Your belongings are yours to take, but anything that has been installed on the car must go with it unless it is taken out before the repossession occurs.
As for getting your property back, paying the money is the only solution.
If you don't get your property reinstated or redeemed, it will be sold or auctioned, and you will be notified of the time and date of that auction.
If you are liable to pay for the vehicle or property still, the lender will notify you so that you can be prepared for what you will pay.
You are also rightfully entitled to attend the auction and bid on the property.
Generally, you will be responsible for paying the difference between what was owed on the property and the auction or sale price.
Getting your car repossessed is not the best solution when you can no longer afford it.
You are far better to sell it for yourself and pay off the loan, because the auction and sale price of repossessed vehicles is usually very low.
Even though there are laws that require the property to sell for 'commercially reasonable' situations and manners, it's generally less than half of market value at most auctions.
If you do not pay the remaining balance, or deficiency balance, in a defined amount of time according to the lender, you can be sued for that money by the original lender or creditor.
These are very important things to keep in mind when it comes to understanding repossessions.
After all, the best tool that you can have is knowledge.
Cars are the most common type of items that are repossessed, but homes and other property are also at risk.
Any time that a consumer gets a secured loan and is required to offer collateral as a promise of repayment, repossession is a potential risk that people could face.
The following information will help you to better understand repossessions and what is involved in the entire process, but should not be taken as legal advice because it is for informational purposes only.
Lenders can repossess property even if the payments are being made on time.
Many people don't know this.
However, if the property is: - sold - damaged - stolen - uninsured It can be taken away without warning.
Additionally, if you have lost a job or had a change in financial status where the lender feels that repayment will not happen as it should, you can have your property repossessed.
Finally, if you refuse to let the creditor investigate the property or do what they need to do, you can be seen as 'in default'.
Depending on the contract, lenders might or might not have to let you know that they are coming for your property.
If your contract doesn't say anything different, lenders are required to let you know that you owe them full payment before they repossess anything that you own.
Most states have a 'right to cure' law that allows consumers a few weeks from the notice to repay their payments plus late fees.
Not all states have these laws, so make sure that you find out what you are working with.
Wisconsin and Louisiana prohibit lenders from repossessing property without a court order, so you might be able to buy a little time if you live in these states.
Any other state simply needs a defaulted loan and an order for repossession for it to be a legal process.
If a consumer realizes that they cannot repay a loan, they can voluntarily give up their property.
Most creditors will accept this as your way of keeping up your end of the deal and canceling the loan.
However, you are still required to pay the remaining balance unless you are told otherwise.
Some lenders won't accept voluntary repossessions or exchanges of collateral for the canceling of the balance.
If your property is seized and you cannot pay for it, the lender will auction the property.
Then, the amount that you owe is subtracted from the auction amount, and you will only have to pay the balance.
For example, if your car is seized and you owe $8,000 on it, it could only be auctioned for $3,000 to $4,000.
That means that you would still owe the lender $4,000 to $5,000 for the car, even though you didn't keep it.
That balance can be resolved through debt settlement, credit counseling, or even bankruptcy if you are so financially strapped that you have no other options.
You need to take the time to learn about your options and see which the lender is most satisfied with so that you can get the best results when attempting to resolve your repossession.
Here are some legal and illegal things that repossessions might involve.
First, most states require that the lender sends a 'right to cure' notice to the debtor before the repossession can occur.
Then, it is required to be done without creating a scene or without force.
However, it is very hard to pin down exactly how repossession should happen.
Here are some tips: Legal actions to repossess cars: - tricking or lying to consumers - hotwiring - duplicate keys - taking a vehicle from unlocked garages, open garages, carports, parking lots, or driveways Illegal repossession tactics (in most states): - breaking and entering - taking the vehicle after the time of repossession when someone has objected the order - using violence or abusive language If you object the repossession, they cannot take the vehicle at that time.
However, they can come back later that day while you are working or at night while you sleep and take the vehicle as long as there is no violence or force used.
Also, some lenders will seek a court order just to be safe.
In most cases, furniture or other property that you have in your home will not be repossessed like vehicles are.
Instead, you will be encouraged to return the items or to make payments to pay them off.
You should never return anything without a written agreement that leaves you owing $0 because you returned the property.
Once your property has been repossessed, you can get it back in most states as long as you pay back what is owed and any fees or costs that have since been incurred.
However, if you falsified information, hid the property to avoid it being repossessed, or if the property value has depreciated or the contract has been reinstated previously, you might not be able to get your property back because you have proven yourself to be unworthy of the loan.
Voluntary repossession makes your credit look slightly better because it shows that you were willing to face facts and deal with the situation.
Don't hide something or try to avoid repossession because it can cost you your car or other property for deliberately impeding the repossession order.
If your property is involuntarily repossessed, you will be more likely to have to pay a lot of fees and have less of a chance of getting your property back.
The good news is that if you have personal property in a vehicle that is being repossessed, you are entitled to it as long as it isn't attached to the vehicle.
Your belongings are yours to take, but anything that has been installed on the car must go with it unless it is taken out before the repossession occurs.
As for getting your property back, paying the money is the only solution.
If you don't get your property reinstated or redeemed, it will be sold or auctioned, and you will be notified of the time and date of that auction.
If you are liable to pay for the vehicle or property still, the lender will notify you so that you can be prepared for what you will pay.
You are also rightfully entitled to attend the auction and bid on the property.
Generally, you will be responsible for paying the difference between what was owed on the property and the auction or sale price.
Getting your car repossessed is not the best solution when you can no longer afford it.
You are far better to sell it for yourself and pay off the loan, because the auction and sale price of repossessed vehicles is usually very low.
Even though there are laws that require the property to sell for 'commercially reasonable' situations and manners, it's generally less than half of market value at most auctions.
If you do not pay the remaining balance, or deficiency balance, in a defined amount of time according to the lender, you can be sued for that money by the original lender or creditor.
These are very important things to keep in mind when it comes to understanding repossessions.
After all, the best tool that you can have is knowledge.
