The repossession of a vehicle or other property can add a new level of frustration to an already irritating situation. Depending on the situation, hiring a law firm that specializes in bankruptcy and repossession may be the best option to make sure the circumstances do not get out of hand. At Groce & DeArmon, we understand that you may have questions and concerns about the repossession process and how bankruptcy and repossession are related.
What is Repossession?
Simply put, repossession is when the lender of a secured loan takes back an item – typically a vehicle – as partial payment when a person has been unable to make payments on the loan. An item can be repossessed if it was the reason for the loan, or if it was used as collateral on the loan.
Repossession does not happen without notice. The lender or other company completing the repossession must give notice before taking the vehicle. The repossessor cannot breach the peace either – this means that the vehicle cannot be taken forcibly or through threats and implied danger. After the vehicle or another item has been taken, the lender will sell the item to recover part of the repayment due from the unpaid loan. If the money received from the sale does not cover all that is owed, a person may still be held responsible for the outstanding balance on the loan.
The repossession of a house is typically called foreclosure and is a different process from repossession. Groce & DeArmon also handles issues dealing with bankruptcy and foreclosure as well as other aspects of bankruptcy law.
If you are having trouble making payments and are worried about repossession, you can discuss different repayment plans with your lender. It may be possible to come to a solution that benefits both parties and allows you to keep your car. Finding a payment solution also helps keep your credit score – a defaulted loan often causes significant damage to your credit.
How are Bankruptcy and Repossession Related?
Bankruptcy and repossession are often connected, but declaring bankruptcy does not automatically lead to a vehicle being repossessed. If you declare bankruptcy before your car is taken, you are granted certain protections to prevent lenders and creditors from taking further action against you, including the repossession of a vehicle. A judge will establish a payment plan which may make it easier for you to keep your car. If you file for bankruptcy and repossession has already happened, you still may be able to get your vehicle back. The option of repayment depends greatly on the willingness of the lender and your options for repayment.
At Groce & DeArmon, we specialize in bankruptcy and repossession, as well as all other facets of bankruptcy law. By hiring a law firm that has experience providing legal aid to those going through bankruptcy, you give yourself the best chance to minimize issues that may occur as you declare bankruptcy. Contact Groce & DeArmon today to see how we can help.