Although there are a number of things that can be repossessed, most repossession involves automobiles. The whole process begins with the signing of a contract between the buyer and the seller. Close attention should be paid to the terms of the contract. It is essentially the provisions or conditions of the buyer’s relationship with the loaning company or seller of the vehicle. In most cases, the buyer would have to be in default on the loan for 30-90 days before repossession actions can occur. In the state of Tennessee, one missed payment can start the process and this is spelled out in the contract. The first surprise is there is no requirement to go to court. In Tennessee, the loaning company can simply hire a tow truck to recoup the automobile as long as the peace is not broken. Next, if the borrower has paid 60% of the loan, then they have the right to redeem the vehicle if they wish. The creditor has to notify the buyer regarding the intention to sell the item. The buyer has 21 days to respond. In other words, the repossessed item cannot be sold immediately to regain losses. If the borrower paid less than 60% of the loan, the loaner can sell the car with no wait time. If they sell it at a loss, the borrower can be sued for the difference. Every state has its own statues when it comes to repossession laws. It is important, in these trying financial times, to make wise choices at the outset of any contract to avoid the possibility of repossession in the future.
