WHAT CREDITORS CAN – AND CANNOT – REPOSSESS
Jan. 31, 2016
Repossessing assets is one method creditors and debt collectors may use to try to compel borrowers to repay their debt – or to try to recoup on defaulted debt when repayment seems unlikely. When it comes to repossession, however, there are specific rules regarding what can and cannot be repossessed. Understanding the difference can be essential to protecting yourself and your assets – and to knowing when it may be time to take stronger action to stop repossession from happening.
ITEMS THAT CAN TYPICALLY BE REPOSSESSED
Homes – Homes are typically purchased via secured mortgage loans. This means that, in the event you fail to keep up with your mortgage payments, the bank (or other lender) can move forward to repossess and/or foreclose on your home. Depending on the nature and terms of a home loan, banks may be able to move forward with this action after just a handful of missed payments.
Vehicles – Similar to homes, vehicles are also often purchased via secured loans. And, again, if borrowers default on these secured loans by failing to make their car payments, the lender can seize the vehicle and try to resell it to recoup its losses.
Assets put up as collateral for loans – If you have taken out any other secured loans by putting up certain collateral for them (e.g., jewelry, art, real estate, etc.), this collateral can also be seized in the event you default on the loan.
ITEMS THAT CAN NOT TYPICALLY BE REPOSSESSED
Although there is a lot that creditors can come after when people default on debt, they can’t take just anything or everything. In fact, some of the things that creditors cannot legally repossess when defaults happen include (but may not be limited to):
Assets not specifically put up as collateral – So, for instance, if you put your vehicle up as collateral for an auto title loan, the lender may be able to repossess your vehicle in the event of a default, but it cannot take other assets not specifically listed as collateral for that loan.
Items purchased via credit cards – Unlike home and vehicle purchases, credit card purchases are a form of unsecured debt. This effectively means that, if you default on credit card debt, the credit card company can’t try to recoup its losses by repossessing the items you bought to rack up this debt.
REPOSSESSIONS: MORE IMPORTANT INFO FOR DEBTORS
Repossession is not the only option creditors have – In fact, creditors can pursue options like wage garnishments or lawsuits against debtors if or when repossession of assets is not an option.
There are options for stopping repossessions from happening – If you have been notified by creditors that they plan to take action against you (via repossession, wage garnishment or lawsuits), one of the single best ways to halt these actions – and to start getting on the path to relief and a financial fresh start – is by filing for bankruptcy.
CONTACT A DENVER BANKRUPTCY ATTORNEY AT GARCIA & GONZALES, P.C.
Are you looking for real relief from serious debt? If so, you can trust the experienced Denver bankruptcy attorney at Garcia & Gonzales, P.C. to provide you with experienced help and honest answers about your best debt relief options.
To learn more about your best debt relief options, as well as how we can help you, contact us today by calling or by emailing us using the contact form at the bottom of this page.
When you contact us, you will communicate directly with one of our attorneys, not a paralegal or legal assistant. We welcome Spanish-speaking individuals to contact us also – hablamos Español.