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John E. Pytte June 26, 2017

When a person obtains a loan for a home, car, large household item and more, the item purchased is what secures the loan. This is known as a security interest payment guaranteed. This financial arrangement is based on a person paying on the item while using it. Should a person stop making payments, it is known as a default. Once this happens, a creditor can get legal permission to remove the item from the person. This is known as a word  cloud


In most cases, a person has defaulted on their loan if they miss one or more payments. It's also possible for a person to be in default if they make payments but don't follow essential terms of a security agreement. If insurance is required, and a person lets the required insurance lapse, they will be considered in default. A person can be considered in default if they sell the item. A person can be in default if the lender believes a person's financial future is uncertain. A person could also be in default if the item is stolen or destroyed. If a person becomes insolvent or refuses to let the lender inspect the item, they could be considered in default.

Breach Letter

When a person's loan is in default, they will be sent a breach letter. This is designed to inform a person that their loan is in default. This must be sent prior to a lender proceeding with foreclosure or repossession. The letter must describe the default as well as the actions necessary to cure the default. A target date for the cure of the default must be mentioned. This is often 30 days from the date a person receives notice from a lender. It must also include the actions a lender may take if the default is not cured on or before the target date.


When a person is in default, it may still be possible to reinstate the loan. Should a lender agree to a reinstatement, a person will avoid having their personal items repossessed. Reinstatement could result in a loan being made current. This could happen in many different ways. The past due payments and fees could be placed at the end of the loan. This will extend the time of the loan. A reinstatement can also occur when all the past due payments and fees are paid in one lump sum. Many of the terms and conditions for reinstatement can be included in the agreement with a lender.

Voluntarily Returning Property

It is possible for a person to voluntarily return property to a lender. The lender is under no obligation to accept such a return. Most lenders won't accept such a return if the amount a person owes is much more than the value of the property. There are some situations where this is acceptable. It's important to speak with a lender and see if this is an acceptable course of action to eliminate a debt. Should the lender only agree to cancel part of the debt, a person will still be responsible for the difference.

Unable To Be Repossessed

There are certain situations where property is unable to be repossessed. This would include any type of property not specifically listed as collateral. If a person has an unsecured personal loan they used to purchase a vehicle, and defaults on the loan, their car will not be subject to repossession since it was not part of the loan agreement. Items purchased using a credit card are not able to be repossessed. Credit cards are considered an unsecured loan. Should a loan agreement not comply with the laws of Georgia, the agreement could be declared void and unenforceable. The items used for collateral with this agreement would not be able to be repossessed.

Being subject to having an item repossessed is a difficult experience. When a person is facing this situation, it’s important they contact a legal professional. They can inform a person of their legal rights and the best way to handle their situation. Georgia Debt Relief is here to help. Call us if you have received a Breach Letter or something like it and we can help you plan your next move. Or you can click on Georgia Debt Relief of Savannah to find out more.