If you fall behind in your payments, your creditors may threaten to seize the property used as collateral for the payment. There are only four legal reasons a creditor can seize your property.
- When you get credit to purchase a specific item and agree to use that item as collateral
- When the creditor insists that you put up household goods as collateral for a loan
- Execution of a court judgment
- Rent to own transactions
Most of these threats won’t be acted on by the creditor. Considering the depreciation value of the item, and the costs involved in hiring someone to take the property, store it and then sell it, it often just isn’t worth the costs involved in seizing it.
Cannot Enter Your Home
While a lender does not have the right to enter your home and seize the property, you will want to cooperate with the sheriff or another government official there to take the property.
Filing bankruptcy can help protect your household goods from being repossessed or seized. When you file your paperwork with the court, an automatic stay goes into effect, stopping all collection attempts against you from harassing phone calls and letters, wage garnishments, judgments and threats of seizing your property.
Most household goods are exempt in bankruptcy, meaning you are allowed to keep them after your bankruptcy is completed. If the property is not exempt, you will have the option of paying what the property is worth and not what is due on the loan. This is called “redemption,” and you can end up paying far less than what is due on the loan.
If you are receiving threats of your household goods being seized, contact a Hidalgo County bankruptcy attorney to find out what you can do to protect your assets.