Facing overwhelming debt can have many negative consequences for your life. In addition to phone calls from creditors, letters and other types of contact from debt collectors, you may also face the threat of losing your personal vehicle to repossession. If this is happening to you, it can be helpful to understand what will happen and what you can do to fight back.
Texas readers may know repossession happens when a company moves to take back an item you purchased on credit. Most of the time, a creditor may move forward with repossession after several missed payments, but it can happen after just one. In many cases, repossession often pertains to vehicles.
How does this process work?
Repossession happens when someone defaults on a contract. It may seem impossible that a person could come to your home or place of business and take your vehicle, but it can happen. Creditors have the right to take back property in order to cover their losses after missed payments. If you have missed several car payments or found out that a creditor is moving forward with repossession, it may be helpful to understand the following about this process:
- Technically, a creditor can initiate the repossession process immediately if the person misses just one payment.
- A creditor has the right to move forward with repossession without a court order.
- Repossession is legal, but it has to be done the right way. The person taking the property cannot break the law or breach the peace to do so.
- Despite what you may think, you cannot hide the vehicle in order to keep the rightful owner from taking it back.
Vehicles are often the subject of repossession, but it can also happen with jewelry, real estate, rent-to-own furniture and more. You may feel out of control of your financial situation, but you have the right to stop repossession by filing for bankruptcy.
Protecting your rights
Filing for bankruptcy will enact the automatic stay, which will halt any creditor contact and repossession efforts against you. This will also allow you to deal with any debt you have in an organized and efficient manner.
If you are overwhelmed by debt, missing payments and getting harassed by creditors, you may consider the many benefits of consumer bankruptcy. A complete evaluation of your case can help you understand your options and help you decide on an appropriate course of action for your unique situation.