Home Foreclosure / Car Repossession
Frank J. Portera • June 1, 2020
When an individual is behind on their payments either to their mortgage lender or to the car dealership that sold them their car, those creditors have rights to either foreclosure on the real estate or repossess the car. Creditors retain secured property interests in homes and cars until those debts are fully paid off under the respective promissory notes and security agreements signed by the debtor(s) at the time of purchase.
Creditors have the right to repossess an individual’s car if the individual is behind on payments so long as the creditors do not “breach the peace”. This means that creditors may not hire a “repo man” to come on to your property and physically use force or threats of force to retake your car over your in-person objections. Creditors may however peacefully repossess your car if it is simply in your driveway in the middle of the night or when no one is present and objecting to the repossession.
For homeowners there is Federal and State law to help the borrower, mortgage lenders must send several notices to a homeowner before they accelerate the entire loan amount and thereafter initiate foreclosure proceedings. Only in the event that a homeowner is more than 120 days behind on their mortgage payments, can a mortgage lender file for foreclosure with the court.
The best way to avoid losing your house to foreclosure or your car from repossession would be to contact your lender and attempt to negotiate some kind of agreement that would bring your loan up to date. Agreements can range from forbearance, deferment, or modification depending upon what you and your lender agree to resolve the default to allow you to keep the property and pay off the debt under the new terms. As most people do not have the funds to catch up on the entire balance that is in default, those individuals have the option to file a chapter 13 bankruptcy to stop the foreclosure sale or the repossession.
Debtors have two options in filing for bankruptcy. First, a debtor may file for bankruptcy under Chapter 7, but that will only stay the foreclosure sale for a short time period until the secured creditors lift the automatic stay to proceed with foreclosure. However, filing under Chapter 13 allows a debtor to keep possession of their home and cars and enter into a repayment plan of 3 to 5 years. Those individuals who have the ability to meet their current expenses and have additional funds to make monthly payments to cure the secured creditor’ arrears over a 3 to 5 years period should consider Chapter 13 Bankruptcy as a viable way to keep their home and cars.
If you have any further questions about how to avoid home foreclosures if you are behind on your payments or would like to learn more about different bankruptcy options, please do not hesitate to call our office. Our office has been successful in helping consumers with collection problems for over 28 years. If you have a debt or tax problem please contact me at (847) 705-7555 or fportera@lavellelaw.com
and find out how we can help you. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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