When you buy a car, furniture or anything on a monthly credit plan, the store or bank has a security interest in the item. While you are paying for it, the creditor can take back the item if you do not make payments as outlined under the contract. Not all purchases on credit can be repossessed though, credit card purchases usually cannot. Repossession is actually the last thing the credit companies want to do in order to get their money back. If you are unable to stop repossession of the item it will give you a bad credit rating and in most instances you’ll still have to pay repossession costs and the difference between the amount the credit company gets after the car is sold at auction and the difference of the loan amount.
There are some ways to stop repossessions of say you car or cars or anything else repossessed. One option is to consider selling whatever it is they are repossessing. If this does not give your enough money to pay off the loan it is still more than you’d receive if it was sold at auction. It is a good idea to inform the creditor of your plans to sell the item. This could possibly make them give you more time before they repossess the item. Once it is sold and you have paid the creditor what you got from the sale the creditor will arrange with you to pay off the rest of what you owe.
You can also contact your lender and discuss your finances. Ask if they are willing to work with you. Sometimes they will reconfigure the loan and add your missed payments on at the end of the loan.
Your last option is to consider filling for bankruptcy. Only consider this if you have considerable debts besides the one that is in danger of being repossessed. If you file a chapter 7 or chapter 13 bankruptcy any threat of repossession stopped. If you file a chapter 7 bankruptcy to try stopping repossession you will have to make arrangements with the lender to bring the payments up to date after the bankruptcy has been filled. You will have to sign a reaffirmation agreement and make sure to keep your payments current if you want to keep the item. Chapter 13 can sometimes work better for a situation than a chapter 7. Filling Chapter 13 causes the repossessions stopped and give you a chance to repay the value of the item. This is a better way for you when you owe more on the car than it is worth. Plan payments made when filing a Chapter 13 can lower you monthly payments. Filling for bankruptcy does result in a bad hit to your credit; use it only as a very last resort.
If someone comes to your door to repossess the item they cannot go into your house without your permission. If they try to break into your house or garage, call the police. If they say they have legal papers call your lawyer.
If this happens and they actually repossess the item without giving you 15 days written notice you can get the item back if you pay the payments you missed, storage fees (usually $15 a day), reasonable charges for the repossession (usually $300).
If they did give you written notice at least 10 days prior you can get the property back only if the creditor agrees and on their terms. This might mean paying off the whole loan right away. If for some reason, you do not get written advance notice you must be given it legally within 3 days of the creditor repossessing the item. Sometimes you can if you cannot raise the money in the required time period if you call the creditor they might be willing to work out an agreement to stop repossession.