Having more debt that you can handle can be a very scary experience. There are all sorts of worries a person can have in such a situation. One such worry is fear that some of their possessions may be repossessed.
A person could potentially face repossession of a piece of their property if they fall behind on a debt that is secured by that piece of property. When a creditor repossess a piece of property, they will generally sell it off to put the proceeds towards the debt the property secured.
Having a piece of their property be repossessed and sold due to a debt can be a traumatic experience for a person. Also, if the asset is something that is a major part of the person’s income-earning activities (for some people, their motor vehicle is such an asset), it could put them into an even bigger financial tailspin than they were previously in. To make matters worse, they may still owe money on the debt the repossession was made in relation to, as the sale value of the repossessed item may fall short of the amount owed on the debt.
Thus, it is extremely understandable that a person who is experiencing debt problems may be very concerned about the possibility of repossession. Our firm understands how significant of an impact a repossession can have and we strive to help individuals who are dealing with debt problems find solutions to their debt issues that could help them avoid repossession of assets that they don’t want to lose.
One thing that can sometimes help a person who is struggling with debt avoid a repossession of a cherished or needed asset is filing for bankruptcy. For one, the stay issued in a bankruptcy generally prevents creditors from engaging in repossession during the course of the bankruptcy proceedings. Also, bankruptcy may be able to help a person get back a previously repossessed asset if the creditor hasn’t yet sold it. Bankruptcy may also be able to help a person avoid losing the asset in the long run. For example, in a Chapter 13 bankruptcy, arrangements may be able to be made in the debt repayment plan to allow a secured debt to be addressed without the person having to part with the asset that secured the debt.