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<\/h2>\n<\/h2>\nIt may seem as if a creditor has all the power in a loan agreement, but there are limitations as to what a creditor can and can\u2019t take from you if you fall behind on loan payments. In some loan agreements, a possession or property is listed as collateral. Collateral means that the borrower has pledged something to serve as protection for the lender in the event that there is a default.\u00a0 For example, in a case where the borrower fails to make payments in full and on time under the agreement\u2019s terms, the collateral can be repossesed.<\/p>\n
Vehicles are considered collateral in auto loan agreements. If the borrower falls behind on payments, the lender maintains the right to repossess the vehicle<\/a>, usually without any prior notice. If the vehicle is sold<\/a> for less than the remaining loan balance, the borrower may still be responsible for paying the outstanding amount<\/a>.<\/p>\n The same is true for homes. If a borrower doesn\u2019t make timely mortgage payments, the lender can repossess the home. This is known as foreclosure. The home is then typically sold as a means of recovering as much of the remaining loan balance as possible.<\/p>\n Rent-to-own items can also be repossessed. This could include items like furniture or appliances that were rented with the option of buying.<\/p>\n Lenders can\u2019t repossess property that isn\u2019t specifically listed as collateral in the terms of the loan agreement. Credit card purchases also cannot be repossessed if you fall behind on payments. And even if some property is listed as collateral in the agreement, a contract can be void if it doesn\u2019t comply with state legal requirements. It\u2019s also important to keep in mind that a creditor can sue you in court to recover money that you owe if the loan agreement doesn\u2019t list collateral.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" When Can a Lender Repossess? It may seem as if a creditor has all the power in a loan agreement, but there are limitations as to what a creditor can and can\u2019t take from you if you fall behind on loan payments. In some loan agreements, a possession or property is listed as collateral. Collateral … <\/p>\nHomes<\/h3>\n
Rent-to-Own Items<\/h3>\n
What Can\u2019t Lenders Repossess?<\/h2>\n
Seek Legal Help<\/h3>\n
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Flitter Milz is a nationally recognized consumer protection law firm that represents victims of improper vehicle repossessions. If you think your consumer rights may have been violated by the lender or repo agent, contact us<\/strong><\/a> for a no cost consultation — whether or not you fell behind on your auto loan payments.<\/p>\n