Is there protection of property from repossession?
Repossession is the power of the creditor to take back goods because of the buyer’s failure to meet the loan payments. There are two types of loans: secured and unsecured. A secured loan is one that requires you to pledge something as collateral. For example, if you purchase a car, the creditor will usually require you to put up the car as collateral. On the other hand, an unsecured loan, does not require collateral. Using a credit card is usually an unsecured loan. If you default on an unsecured loan, the creditor’s only recourse, after the letters and the collection agency efforts fail, is to sue. But if you default on a secured loan, the creditor can repossess the collateral and sell it. If the money from the sale isn’t enough to pay off the loan, the creditor can sue you for the balance of the loan. If you fall behind in your loan, you should contact your creditors as quickly as possible and attempt to work out a voluntary repayment plan. You can do this yourself or with the assist
