If there is a breach of the peace caused by the repo man, the creditor could be liable. If you feel threatened by the person who has been hired to reclaim the property, call the police. It is against the law to prevent repossession of the property or threaten the person that has come to repossess it.
If you try to prevent the repo man from taking the property, you are violating your security agreement and may expose yourself to criminal penalties. You can redeem your property by paying the debt in full not just the amount you are behind at any time before the creditor sells or auctions the property.
You may be charged reasonable costs for the repossession in addition to what you owe. If you hide the property you are violating the agreement you made with the creditor, which requires you to make the property available upon demand. You could also be subject to criminal charges. It is a crime to conceal, remove, or harm property on which there is a lien with the intent to hinder enforcement of the lien. The repo will stay on your credit report for 7 years. Filing bankruptcy may stop repossession and could allow for return of the property if you can make the payments.
If you do not redeem the property, it will likely be sold at an auction or a private sale. You have the right to advance notice of the time and place of any public sale. If it is a private sale, you are entitled to notice of the date after which private sale can be made.
The proceeds of the sale first pay the cost of the repossession, storage of the property, preparation for sale, and the costs of the sale itself. Any remaining proceeds after the sale are used to pay the debt.
If there is any money left after the sale and debt, the creditor must pay it to you. In most states, your lender can sue you to collect this deficiency. However, as discussed above, there are defenses to a deficiency action.
The most common defenses are:. You might still be able to get your car back if the lender has not sold it yet. Below, we discuss some of the options available to you for getting your car back. Redeeming essentially means buying back the vehicle. You can generally redeem your car if you pay the lender your entire loan balance, including all arrears and repossession costs.
But most people usually don't have the money required to redeem a car. Some states allow you to reinstate your loan and get the car back if you can cure all of your arrears and pay for the repossession costs.
After you reinstate, you must continue to make regular payments on the loan. Learn more about the difference between redemption and reinstatement. If your lender sells the car at an auction, you can bid on the vehicle to try to buy it back. But even if you buy back the car, you'll still remain liable for any resulting deficiency balance. If you file for bankruptcy prior to the sale, the automatic stay will prohibit the lender from selling the car without obtaining court permission.
Depending on the type of bankruptcy you file, this can buy you more time to gather the necessary money to get your car back or allow you to cure your arrears through the bankruptcy. Read more about how to get your car back after repossession. If you're behind on your loan payments, the best thing to do is to communicate with your lender.
How your state treats the use of these devices could affect your rights. Contact your state attorney general if you have questions. After your vehicle is repossessed, your lender can either keep it to cover your debt or sell it. In some states, your lender has to let you know what will happen. If you don't repay the debt or are in default on a loan for some other reason, most states let the creditor take the secured property without first suing you and getting a court judgment.
You have a car that you don't owe any money on, and you offer it as collateral for a loan to start a new business. If you fail to fulfill the terms of that loan agreement, the lender can take your car.
If you're unsure about whether a particular debt is secured, check your credit agreement. The agreement will also detail what would put you in default on the loan, like being behind on your payments or not maintaining proper insurance. When people stop making their mortgage payments, they sometimes refer to the process of losing the home as a lender "repossession.
Instead, it must go through a specific legal process called foreclosure. Creditors who don't have a security interest in an item of property can't take it without a judge or court clerk's approval.
Be aware, however, that the creditor can always sue you in court to recover the money you owe. If the creditor wins the lawsuit, it might be able to garnish your wages , put a lien on property you own, or seize and sell your personal property. If something isn't specifically named as collateral for a debt, it can't be repossessed. For example, say you have an unsecured personal loan and a car loan. You default on the personal loan. As long as you continue to make payments on the car loan, the bank can't repossess your car because it wasn't explicitly named as collateral for the personal loan.
Credit card debt is unsecured, which means the credit agreement doesn't name anything as collateral for the loan. So, items you purchased with a credit card can't be repossessed. A contract that doesn't comply with your state's legal requirements might be void and unenforceable. If the contract is unenforceable, the creditor might not be able to repossess collateral named in the agreement.
A lawyer can review your contract for validity and advise you of your consumer rights. If you're behind on your payments for a secured debt, it's a good idea to communicate with your lender.
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