Repossession isn\’t something anyone wants to think about, but the property market implosion starting from 2008 onwards has made repossession of personal property, including homes and cars, a fact of life for everyone from blue-collar workers to billionaires. Nobody – regardless of their financial standing – likes the idea of repossession because of the stigma attached to it i.e. you can\’t pay your existing debts. With that being said if you can\’t afford to make your repayments on any given loan then you can expect to be dealing with a repo company sooner rather than later.
When you take out a loan to purchase a given item you\’re expected to honor the terms of that loan i.e. making the required repayments, be it for a car, a house or anything else. When you fail to make the promised payments that leaves you in breach of the terms of the loan, which means you\’ve defaulted on the loan itself. Some banks and finance companies allow a grace period, allowing you to miss repayments on your loan for a certain amount of time. However if you keep missing repayments you\’ll default on your loan, and that\’s when the bank or finance company might pass the debt onto a repossession company
When it comes to repossession of your property the laws in New Jersey (N.J.S.A. 12A9-609) are very clear on the matter in that you cannot obstruct an employee of a repossession company when they\’re trying to retrieve the items you\’ve defaulted on payments for. The same repo employee cannot however break into your property – or even open a gate to gain entry – to repossess your car, for example. If for any reason an employee of such a company does use force to retrieve a car, or other item, you can contact the local police for assistance.
After Repossession
Once the bank has repossessed your car, for example, they then have the option of selling it for the highest possible price to cover your total debt to them. In situations where your property is due to be sold at auction the bank or finance company are legally obliged to inform you of this 10 days in advance. This gives you the opportunity to buy your car back from the repo company, although you will be expected to pay any expenses incurred while the car was in storage or being transported.
Declaring Bankruptcy
It\’s common practice for people facing repossession to declare bankruptcy in the hope of preventing any item of their property from being repossessed. The reality is that this can be successful in preventing the bank from repossessing your car for example, the reason being that it\’s seen as necessary for you to retain ownership of it so that you can travel to work to pay off your other debts.
If you\’re certain you\’re going to miss a payment on a loan then contact your lender and explain the situation to them – including a request for a modification of your loan terms or an extension on your existing payment schedule. This is also a lot easier to manage than having your car repossessed, plus you\’ll find that most banks can be quite accommodating in these situations.
If you suspect that you property has been illegally repossessed you should engage the services of a professional wrongful repossession lawyer as soon as you can – the law will generally be on your side in situations like this.