Facing the threat of repossession? Here is what you need to know

There are many consequences to owing a significant amount of debt. If you are in a difficult financial situation and behind on your payments, one of the things you may face is the threat of repossession. At this point, you may want to know what you are up against and how you can take steps to reclaim your financial future.

Repossession is the process of taking back property bought on credit if you are behind on making payments. Vehicular repossession is a common form of repossession, and it may come as a surprise to you that a creditor can simply come and take your car out of your driveway. No matter how much debt you have, you still have rights, and you have the right to pursue a better financial future.

The process of repossession

In many cases, repossession starts with the automaker and the lender moving forward with taking back the vehicle. Often, this is not possible without permission from a Tennessee court, but, depending on the details of your individual situation, it can sometimes happen without permission and without informing you first. There are two main types of repossession. The differences between them include the following:

  • Involuntary repossession – This happens when the lender or creditor actually retakes the vehicle without permission. Often, they will hire a third party to undertake the responsibility of doing this.
  • Voluntary repossession – Voluntary repossession is what happens when you willingly hand over the vehicle back to the lender. People may choose to do this when they realize they cannot afford payments and will not be able to catch up.

One important note about repossession is that, after they take the vehicle or you willingly surrender it, that does not mean that your financial responsibility for the debt is cancelled. The creditor will expect you to pay what you owe, with or without your vehicle in your possession.

A way out for you

You have legal options available. While it is overwhelming to learn that you could lose your vehicle, there may be a way out. By filing for bankruptcy, you will enact the automatic stay, which halts all collections efforts against you. This includes the threat of repossession.

Through bankruptcy, you may be able to reclaim your financial future and deal with some types of debt once and for all. By seeking an assessment of your case, you can learn more about which bankruptcy option is best for your individual financial situation.