The negative impact of owing a significant amount of debt can affect multiple areas of your life. In addition to a growing balance of debt you cannot manage on your own, you may also have to deal with phone calls, letters and other forms of contact from creditors. In certain situations, a creditor may move to retake possessions bought on credit.
Repossession is a process that allows a creditor to retake property for which a consumer owes money and is late on payments. This means that if you do not make your car payment, the bank or another type of creditor can initiate the repossession process. However, you still have rights, and there are limits to what a creditor or repossession company can do and how they treat you.
How does this process work?
It may come as a surprise to you to learn that a creditor can move to take your property. Frequently, creditors outline their right to repossession in the terms of a loan agreement. Upon defaulting on a loan, creditors are within their legal bounds to retake certain property. You may find the following facts about repossession informative and helpful if you are facing threats of the possibility of losing some of your personal property:
- A creditor has the right to initiate the repossession process at any point after defaulting on a loan, even if you only missed one payment.
- It is not necessary or required for a creditor to have a court order to start the repossession process against a person who owes money.
- A creditor has the legal right to take back property on which you owe money, but that does not mean that the repossession agent can break the law in the act of repossessing property.
In some cases, creditors may overstep their bounds, take property without grounds or authority, or otherwise harass a consumer over debt. If you believe that your property was repossessed without reason or you are receiving threats of repossession in an unlawful or harassing manner, you have options for addressing the situation.
The right course of action for you
You have the right to stand up for yourself and take action to halt inappropriate treatment from creditors. Certain laws protect the rights of Minnesota consumers, no matter how much debt they owe. If you are the victim of unlawful collection practices, you may have grounds to initiate legal action against the liable party in order to make the unfair treatment stop.