Property Repossession: A Look at Exempt and Non-Exempt Property
You’ve worked hard to amass all of your personal belongings—yet buying items that are beyond your means can sometimes carry consequences such as property repossession. Here’s a brief look at exempt and non-exempt property and how they relate to repossession:
Reasons for Repossession
If you need to buy a piece of property that you can’t afford outright, like a car or a house, you can choose to have a lender buy it for you and pay them back over the following few years. This is what is known as “secured debt,” since it’s secured by that piece of property. If you fail to make your payments, that item, known as “collateral,” will be repossessed.
Exempt Property
Technically, a lender can only repossess property that is stated as collateral in your initial loan contract. For example, if you default on a loan for a new car, your lender cannot legally take your home. Anything purchased with a credit card is also exempt from repossession, as credit card debt is unsecured and does not require you to name any possessions as collateral. Keep in mind that if there is a mistake with your loan contract, any items listed as collateral will not be repossessed.
Non-Exempt Property
Anything that you list as collateral in your initial loan contract is not exempt from repossession. If you miss multiple home mortgage payments, your home will be foreclosed upon—one form of repossession. If you fear that repossession is imminent or that some of your property was unfairly repossessed, it’s important to call an experienced lawyer to set matters straight.
If you’re in a tough financial situation and can no longer make your loan payments, contact the Law Office of Charles P. Castellon. Our skilled attorneys would be happy to closely examine your loan contract and help you fight against foreclosure or repossession. Call us today at (888) 430-7139 to set up a consultation.
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