Repossession is a noun which means act of getting back or regaining. It generally refers to a financial institution taking back an item that has been used either as a collateral or rented or leased in a transaction. In Repossession the party having the right of ownership of the property takes it back from the party having the right of possession. For instance, if a person fails to render prompt payments on a new car, the finance company which has extended the credit has the right to repossess the car. This Repossession is usually done in accordance with a credit or purchase contract which states that the seller could repossess the property purchased if purchaser fails to make due payments in a certain period of time. For prime lenders this time period is 30 days but it depends on payments that have already been made and the reason for delay.
Though the lenders don’t need a court order to repossess the property from the debtor, but it’s a norm here in
Voluntary Repossession
Voluntary Repossession is done by you when you hand back the possession of the property (house) to your mortgage lender. But you must be aware of the fact that handing back the property to the lender will not absolve you of from debt. Mortgage comes to an end even if the debt is not paid in full. So you are still liable for it. So don’t try to this just to avoid to court costs because you can be caught in an inevitable disaster in the long run.
Default Repossession
These possessions are done by the lender through litigation in the court to recover the money from you by taking back the property to sell it.
Default Repossession through the letter from the Lenders
In Default Repossession you receive a letter from your lender letting you know that you have missed the payment and demanding from you to rectify the problem. You should make as much payments as you can but if you could not make it, try to reply promptly to letters you received due to non payments.
Through Court Summons
If you have received court summons, a prompt reply from your side is required if you want to avoid harmful results. The decision made by the court can be a cancellation order of the Repossession, or a delay in which this Repossession id suspended for a period of time, or it could be an agreement also. But if the Repossession is granted, date is set by the court by which you must hand back the possession of the property in question. If you don’t leave the property by the set date, you will be removed from the property.
After Repossession is done, the property will be sold either by auction or traditional estate agent to pay off the mortgage. Usually the property will go the estate agent first, if it proves a failure, then it goes to auction where the value will be massively lower.
How to stop Repossession
The lender has the legal right to achieve the best possible sale price but if the property has been undervalued, you can ask the court for an injunction to prevent the sale. It can be done before the date of the completion of Repossession.
Repossession can also be stopped by paying off the debt soon after the eviction. If your circumstances have changed and you feel that you can pay off all the debts, apply for a conjunction to stop the sale of the property.
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