Assets Creditors Can & Cannot Repossess
If you’re behind on payments, you might be starting to worry about creditors coming to repossess your property, most commonly your car. However, your creditors can’t take away all your assets, so it’s worth knowing what they can and cannot do in order to protect yourself and your property from unfounded seizure attempts. However, if creditors do come knocking, it’s best to hire expert bankruptcy lawyers in Chula Vista, CA and put a stop to your financial woes.
What can creditors repossess?
First, let’s take a look at all the assets your creditors are allowed to repossess if you fall way behind on your loan and debt payments:
All auto loans which are secured by a lien on the title give the lienholder the right to repossess your vehicle in case you default on your loan. Your loan terms may provide a specific grace period.
What’s more, your lender usually doesn’t have to provide advance notice before attempting to complete their repossession, and if they succeed they’ll probably sell your car in order to recoup a portion of the money you owe.
You are still financially liable for any deficiency that may remain after the vehicle is sold at auction. A deficiency exists when the sale proceeds do not cover the loan balance and/or costs of repossession.
A creditor can also repossess any item you’re currently renting with the option of purchasing them entirely, such as appliances, electronics, furniture, and other similar assets. However, the lender cannot simply enter your home and seize your TV or sofa.
They need permission from the court before entering your home and taking possession of such property. On the other hand, any assets you accidentally leave out in the open, for example a barbecue in your yard, can be theirs for the taking.
Property you used as your collateral
Finally, any property you used as collateral for your secured loans is fair game for repossession in case you don’t make your payments and default on your loan. For example, if you use your vehicle as collateral for a loan for starting your business but fail to make payments, you can lose possession of your car.
What can’t my creditors repossess?
However, your creditors aren’t entitled to all your property, so it’s essential to know what they can’t take away from you:
Assets not specified as collateral
All property you haven’t clearly specified as collateral property cannot be repossessed. Take as an example a situation where you have a car loan and an unsecured personal loan and you default on your personal loan. If you keep making payments on your car the bank who gave you a personal loan cannot repossess your vehicle because it wasn’t specified as collateral.
Purchases made with your credit card
All debt on your credit card is unsecured debt. This means that you place nothing as collateral on that type of loan, eliminating any possibility of the items you bought with your credit card being repossessed by your creditor.
Collateral present in a contract they cannot enforce
If a loan contract doesn’t abide by the legal requirements of the state you reside in it could be unenforceable. If that’s the case, your lender will most likely be unable to repossess any collateral present in the loan agreement.
Who are the bankruptcy lawyers from Chula Vista, CA capable of preventing repossession?
When creditors come knocking, you’re probably in deep financial problems. If you find yourself in such a situation and there’s nothing you can do to avoid repossession of your property, it’s essential to be familiar with the most important details regarding repossession and know what your creditors aren’t allowed to take from you. Also, remember to learn more about the intricacies of car repossession, as this is the most common asset they’ll try to take.
However, why allow yourself to go through all this trouble if you can contact Chang & Diamond, file bankruptcy, and regain your independence? We’re your reputable professionals dedicated to helping you file quickly and efficiently and receive financial relief as soon as possible. All you have to do is schedule your free initial consultation. After that, take a moment to settle your thoughts at Border Field State Park and continue toward a certain financial future.