What To Know About Repossession and Debt Relief

debt reliefIt is possible for people to experience financial problems and not be able to meet payment obligations to their lenders. This could have tremendous impact with major items such as homes, cars and more. When an individual gets too far behind in their payments, the lender has a number of options if the debt is secured. A lender can legally repossess items such as a car or home and more. They can also repossess any items of value offered as collateral to secure a loan. Speaking with an Savannah debt relief attorney can help a person know their rights in this situation. 

Repossession


This is a lender reclaiming ownership of an item of value from a borrower. This could be anything of value attached to a loan. Repossessing could involve vehicles, real estate, items used for loan collateral and more. The laws associated with repossessing vary with each state. The details of when and how an item can be repossessed should be covered in the lender's contract. 

Types Of Repossessing


There are two different types of repossessing that can be done by a lender. Voluntary is when a borrower willingly gives back the item or collateral to the lender. They may be a situation where they won't be able to make payments for an extended period of time. There is also involuntary repossession. This is when the lender, or a third party they hire, takes possession of an item or collateral. The law enables them to take the property without the borrower's permission. This is acceptable as long as it is done in accordance with state and federal laws. In some cases, this can happen if a borrower refuses to permit a lender to examine the collateral. A lender could begin the process of repossession if they believe the chances of a person making all the required payments is not possible.

Notification


The type and amount of notification a creditor has to provide before repossessing property is different in each state. Some states require very little notification. The process of notification is usually covered in the contract provided by the lender. Most states require a creditor to notify the borrower that it has accelerated the debt and the entire contract amount is due. Some contracts state the borrower waives the right to receive advance notice. Many individuals have successfully challenged this type of waiver clause in a contract. Success usually requires the services of a debt relief attorney.

Right To Cure


In many states, a creditor is required to notify a borrower of their right to cure their default. In order to do this, a borrower must take action prior to defaulting on the loan and having property repossessed. A borrower should be given a certain period of time to pay all of their missed payments and late charges. They may also be given a period of time to obtain any required insurance. A person needs to know how their state's laws affect their right to cure a default.

How To Avoid Repossessing


A borrower needs to speak with the lender prior to getting behind in payments and make repossessing the property or collateral a reality. Most lenders are willing to work with a borrower to keep their account current. Some have programs designed to help borrowers experiencing financial difficulties. Most lenders would prefer to work with their borrowers rather than take back the property or collateral.

After Repossession


Once a lender takes back an item or collateral, they will attempt to sell it and pay off the outstanding loan. A lender will often get less money selling an item or collateral that what is remaining on an outstanding loan. When this happens, a borrower will still owe the lender the difference. A lender may still be able to collect the balance. This means a borrower could lose their vehicle, real estate or collateral and still be required to pay the lender money. 

Savannah’s Georgia Debt Relief group, headed by John Pytte, is your best resource when it comes to solving cases of financial difficulty. Bankruptcy is bad enough, but  repossession can be a terrible situation, so get help before it comes to that. Call or click on us today