Secured creditors are not without rights. A creditor that has a secured loan, one in which you have placed property as collateral such as a car or other personal property, has the right to redeem that property in the case of a default on your obligation to pay back the loan. One remedy available to the lender is the remedy of repossession.
Your creditor has the absolute right to repossess the property you pledged as a guarantee of payment if you default on your obligations. The creditor will sell the property, generally at a distressed property auction, and if the monies received do not cover the remaining balance of the loan the creditor has the right to a court judgment against you for the remainder of the balance of the loan. Many states require the creditor to inform you of the precise date, time and location where your collateral will be put up for sale. If you can raise the funds to redeem the pledged collateral you may do so before the date of the sale.
It is important to understand that before a lender can repossess property pledged as collateral you must be in default on the loan. What constitutes default is generally spelled out in detail on the loan documents you sign. Generally, non-payment is the most common form of default, however there are other grounds for default such as not maintaining adequate insurance on the property. Bankruptcy may cause a default, however you generally have the right to acknowledge greeneasylife.com secured loans and stave off default in these cases. Be careful to understand the terms for default spelled out in the loan documents before you sign. Remember that the fine print is designed to protect the lender and not YOU!
If a secured loan is in default the creditor has the right to repossess the property pledged as collateral. There is no obligation for the creditor to obtain a court order to repossess property if that property can be seized peacefully. Many states require the creditor to notify you that you are in default and that they are about to repossess the collateral pledged but in a few states the repossession can proceed without any formal notification.
The primary restriction placed on creditors is that they not create a breech of the peace while repossessing the collateral. This essentially means that the creditor may not enter your home, garage or other premises without your consent. In a few states this means that the creditor is barred from breaking in to your locked car in order to repossess that vehicle.
In the end, however, if you default on a secured loan you can expect to have the property pledged as collateral seized by a repo-team working on behalf of the creditor.
Copyright © 2007 Roger Passman All Rights Reserved
Roger Passman is the President of WDC Financial Services, Inc. His firm works with clients to restore damaged credit, negotiate payment plans, and reduce debt. You can visit WDC Financial Services at [wdcfinancialservices.com]
WDC Financial Services also maintains a blog filled with information about managing financial obligations and more at [creditrepairman.wordpress.com]
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