Repossession, Foreclosure, and Bankruptcy in Florida
It is common for individuals facing financial pressures to worry about losing their car, major appliance or other property to creditors. The repossession process can be humiliating and add stress to an already difficult time in your life. Fortunately, if you are facing mounting debt, you may have legal options to protect your property and receive a fresh financial start. To learn more about what options make the most sense in your specific case, contact the legal team at Dolaghan Law today to see how we can help.
Foreclosure/Repossession: What It Is and How It Works
Repossession or foreclosure may be a possibility whenever you buy an item based on a financing agreement. This is most common with larger purchases such as a car or appliance. At times the lender may be a third party, such as a bank that loans money to purchase a home. As part of the agreement the lender usually retains a “security interest” in the property. In these situations, if monthly payments are missed, the lender may have the right to repossess or
The most common pieces of property that can be repossessed are:
● Vehicle: When you purchase a car with financing from the dealer or a bank, they may retain the right to repossess in the event of non-payment.
● Home: When you buy a home, you likely take out a mortgage which allows the lender to foreclose on the property and reclaim it in the event that you fail to keep up with your monthly payment obligations.
● Appliances and furniture: Large purchases are often made with store financing, which may come with a right of repossession with non-payment. It is important to distinguish this from items bought with a credit card. Credit card debt is not secured.
Bankruptcy Can Protect Your Property
Seeking bankruptcy protection may be a critical tool to protect your property before foreclosure or repossession. No two cases are identical, but both Chapter 7 and Chapter 13 Bankruptcy come with an “automatic stay” which can prevent creditor’s attempt to repossess your property. As a result, when bankruptcy protection is sought before the property is lost, an automatic stay offers a critical benefit for people with financial struggles. The automatic stay acts like an injunction as it stops foreclosures and repossession in its tracks. The automatic stay also prevents creditors from engaging in collection activities, like intrusive calls and letters or garnishing bank accounts and wages.