If you’re experiencing financial difficulties, you may have stopped making payments on secured debts like cars or electronics. The consequence of this action is commonly called repossession. Because you have defaulted on the loan, you are no longer entitled to keep your car, home, or other item. Repossession of a home is usually called foreclosure, and it works differently than repossession of cars or electronics.
As soon as you miss a payment, your lender can repossess your car or other possession. However, many lenders wait until you have missed two or three payments before repossessing your item simply because the process is expensive and time-consuming. You will receive one or more notices of missed payments, notifying you that you are in danger of repossession. At this point, you usually have the option of making up missed payments and keeping your property. If you fail to do so, you can expect repossession.
Your property will be sold at an auction. You will be notified of the date and time of this sale, so you can attend and buy back your property, if you choose. To do this, you must pay the balance of the loan and the costs of repossession. If the property sells for less than its fair market value, the lender may pursue a deficiency judgment and force you to pay the difference between the sale price and the fair market value. Though this is possible, it doesn’t usually happen.
If you’ve missed payments on a car, electronic equipment, or other valuable item, you could be in danger of repossession. In some situations, declaring bankruptcy may be a good strategy for stopping the process. To learn more, call (262) 827-0375 to schedule a consultation with a Milwaukee bankruptcy attorney at Burr Law Office.