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What Can a Creditor Repossess?

Certain items can be repossessed by the creditor if you default on a loan.  If repossession is allowed, then a creditor does not have to get a court judgment in order to repossess the property.

Your home – the loan on the home is secured by the property it was purchased with.  If payments are missed then foreclosure may result.  You will be evicted and the property sold to recover the value of the outstanding loan.

Your car – Almost all loans, whether originating from a bank, dealer, or credit union give the creditor the right to repossess the vehicle if the loan is in default.  The  lender will sell the vehicle to recover the money owed.  The owner may be required to pay any difference between the loan balance and the sale price.

Rent-to-own Property –This includes all appliances, electronics, furniture, and any other rental items with the option of purchasing.

Property used as collateral – If you secure a loan with property (collateral) is held to guarantee prepayment of the debt.  If you don’t repay then most states let the creditor take the property without suing first.

If you are not sure if a loan is secured by property then check the credit agreement.  All the detail on what constitutes default on the loan.

What Items Cannot be Repossessed?

These items cannot be repossessed, but if a creditor wins a lawsuit for the property, then they may be able to garnish your wages or put a lien on the property.

Property not named as collateral and credit card purchases cannot normally be repossessed.