Bankruptcy & Repossession 411
How to know if your property can be seized by lenders
If you currently have large amounts of debt, you could face the risk of having your property repossessed. It is important to note, however, that only certain kinds of debt can make you eligible for repossession.
This guide can answer some of the main questions that arise when people with large amounts of debt are worried about losing their property, including what kind of debt can lead to repossession and what items can be repossessed.
What kind of debt can lead to repossession?
The only kind of debt that can eventually lead to having your property repossessed is secured debt. This means the money you borrowed needed to be acquired through a secured loan, meaning the money had to be used towards the purchase of a specific item.
Secured loans can be fore anything from a home or condo to a car, computers or furniture.
How can my property be repossessed?
The laws for repossession vary from state to state, so there is no one all-encompassing way to explain the repossession process. The conditions under which property can be repossessed does, however, depend on the specific contract you signed.
Lenders often have the right to reposes property after the first missed payment. This is one reason it is extremely important to read every word of a contract you sign. You never want a surprise visit from the Repo Man.
When does repossession happen?
Typically, repossession happens after you have missed several payments. Depending on your lender and contract, you will most likely receive several warnings through the mail and by phone telling you that you are at risk of having your property repossessed. Do not treat these warnings lightly, or else you might wake up one morning or come out of work to find your car missing.
Can I get property back after is has been repossessed?
While it is possible to get repossessed property back, it’s not going to be cheap. In addition to paying the debt that you owe on your repossessed property, you will most likely face repossession fees, towing charges, impound charges and other fees.
Will bankruptcy protect me from repossession?
Many times, bankruptcy can allow you to keep your property and protect you from repossession. Chapter 13 bankruptcy allows you to start a payment plan to repay debts owed, and can often let individuals retain their property.
Chapter 7 bankruptcies can often lead to the filer returning the property connected to the loan to the lender without owing anything else.
It is important to remember that bankruptcy cannot always protect you from repossession. If a lender has placed a lien on your property, they may be able to repossess your property even if you do declare bankruptcy. This is yet another reason why it is important to always read every word of a contract before you sign it.
To learn more about bankruptcy alternatives and ways to avoid bankruptcy, please visit Total Debt Relief.