subject: Repossessions On Credit - What Do I Do? [print this page] This article looks at what exactly repossession is, what to expect, and what you can do if you find yourself in this unfortunate predicament.
The term repossession generally refers to the practice of a financial institution, such as a bank, taking back an object that was either rented, leased or used as collateral. An example is a customer being behind on their car repayments, and the creditor taking back (repossessing) the vehicle.
In arguably the worst-case scenario, if you are late with your mortgage payments it is possible for a house repossession to occur. If a customer relinquishes a financed item themselves it is known as a 'voluntary repossession', but most instances are involuntary.
The repossession is usually done in accordance with the terms and conditions of a previously agreed contract, and can occur if a customer is more than 30 days late in making a payment, or invokes any other serious breach in the terms of their contract.
In terms of how to fix a repossession, if you are behind on any payments, the first thing to do is to contact the creditor and make them aware of your predicament. Burying your head in the sand is not advisable, as the issue will not simply go away. Many creditors will be willing to work with you, and may offer to set you up with a payment plan, allowing you to get your finances back on track.
If you are unable to do this, be aware that a creditor is not required to give you any advance notice before repossessing your property. In relation to vehicle repossession, the creditor is allowed on your property to legally tow away the vehicle, as long as they are not in a breach of the peace.
If you suspect that your vehicle is about to be repossessed, it is advised that you remove all personal items from it, as these can be hard to recover after the vehicle has been taken away. Once the vehicle has been removed, the creditor will likely demand that you pay the overdue payment(s), as well as the financial cost of repossessing the vehicle. It is even possible that they may demand that you pay off the full balance of your loan or agreement.
Failure to meet the above demands means that the creditor has the right to sell the property through either a private or a public sale. You will be notified of the time and place of the sale, should you wish to attend. Sale proceeds will then be deducted from the outstanding balance, and you will be billed for the rest.
There is no simple solution to fix a repossession, other than to not let things get to that stage in the first place. Make every effort to make your repayments on time, and work with - rather than against - creditors if you are struggling to do so.
Although the bulk of this article relates to vehicle repossession, people facing house repossession should take similar steps. Contact the creditor, stay calm and get professional advice where possible.
