Repossession: the act of retaking possession of something, particularly when a buyer defaults on payments.
If you are behind on payments from debt or loans, you may be worried that creditors will come and repossess items such as your car, truck or boat. If you have put anything up as collateral on a loan, and you default on your loan, it becomes fair game for creditors to take it when you cannot pay back your debts.
Creditors are able to repossess:
- Property you have signed as collateral.
- Vehicles, including cars and motorcycles.
- Rent-to-Own items.
Creditors cannot repossess:
- Property not signed as collateral.
- Things purchased via credit card.
- Things listed as collateral when the contract is unenforceable.
Property Repossession:
Let’s say you took out a loan to start a business and needed to put down something as collateral and you chose your paid off car. If payments are not made, creditors can take your car – not for failure to pay a car loan, but because it is collateral for your business loan. You can put down a variety of things as collateral, the most common are cars, trucks, boats and campers. All of these can be repossessed if you default on your payments.
Vehicular Repossession:
Most auto loans – no matter what type or where from – give creditors the right to repossess your vehicle if you fall behind on payments. While it is illegal for a creditor to break into your garage and take your car, they can take your car from your place of business or from your driveway while you are sleeping. They cannot use violence, threaten you or use physical force, but in the state of North Carolina lenders are not required to provide notice before they repossess your vehicle.
Rent-to-Own Repossession:
If you have items that you have rented instead of purchased, such as furniture, electronics, appliances, etc., those can be repossessed. In order to do this, creditors have to get permission from the court or someone in the household because it requires entering the home. However, if you rented something like a grill and it is sitting in your unfenced backyard, then creditors can take that. If your backyard to fenced, then they cannot.
If you are behind on your car payments or have already had your car repossessed, Leslie Craft can help. Leslie is an experienced bankruptcy attorney, and she can explain your rights regarding repossession. If you have fallen behind on payments it may be time to explore bankruptcy and see if it is the right option for you. Call Craft Law Offices today at 252-752-0297 to schedule your free consultation today.