Can Creditors Take Your Possessions?
Creditors Seizing Assets
If you are struggling with debt and are worried about your personal assets such as a home, items of value, or a vehicle, don’t panic. The truth is that in most cases a creditor cannot walk in and seize your assets. This is not always true however; there are times when a creditor can simply take your personal property. In these cases where the creditor has immediate and legal right to take your property upon default of a credit line or loan, the debt will always be a secured one. A secured debt, such as a loan, which has been obtained with a contract explicitly stating you will make payment for or lose a named piece of property, is very much legal. The contract will say in no uncertain terms that when you fail to make payment, your stuff becomes their stuff. All very swift and 100% legal. A secured loan, while a safe bet to not only get easy loan approval and a low interest rate, is based on the fact that your property can be seized. It is the insurance policy your lender uses to make sure they collect your payments or at least a valued asset.
An Unpaid Vehicle Loan Can Mean An Empty Garage
In the case of a vehicle loan, either right from the car dealership or through your credit union or bank, the threat of repossession is explicit. In any contract for a vehicle loan, it will always be stated that if you fail to pay, they have the right to take their car back. Worse than that they will not only take your vehicle back and sell it, they will sue you in most cases for the difference they are still owed on your loan after the sale. Additionally they can seize your car when and where they wish without express notice of an impending repo. The good news is with a car repossession, it should not be a complete surprise to you. The lender will contact you after you fail to make payment and in most cases send you several notices before actually issuing the repossession action.
Bankruptcy Possession Seizure
Under new bankruptcy protection laws passed just recently in the United States, you can no longer hide your assets from debt collectors in a bankruptcy filing. In the “good-ole days” a bankruptcy would wipe your financial slate clean and while damaging your credit rating, at least take care of those outstanding debts. Not anymore. Now the credit card companies as well as other creditors can sue you and take your assets to pay off your unpaid debts.
- How To Stop Creditors From Freezing Your Bank Accounts?
- How Do Debt Management Companies Work With Creditors?
- How To Negotiate Interest Rates With Creditors
- Is It Better To Negotiate With Creditors Yourself?
- How To Get Creditors Off Your Back?
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