Monday, November 16, 2015

Repossessions


Life was going swell.  No credit card debt, current on your house payment and your income was steady.  You decided to buy a Boat, an RV or a New/Used Car.  However, after a few payments you quickly found out that with storage, insurance and gas for your luxury item, you could no longer afford the monthly payment.  Maybe your furnace went out and you needed the money to stave off the deep freeze.

Two months of non-payment can quickly lead to Repossession.  You tried working with the bank directly and although you escaped by with a one month solution, if the matter was not readily cured, the Repo Man comes out with little warning, tows your equipment and brings it back to the bank where they will quickly auction it off.

The good news is, you are now out of the long term loan.  The bad news is, you still owe the remaining unpaid principal balance plus auction fees and interest.

Maybe you had a 15 year loan for your Boat or RV and this happened 7 years into the term.  You paid tens of thousands of dollars over this period of time but now you are receiving collection notices for the deficiency balance.  The original loan amount could have been $40k, and you may have nearly paid that amount in totality, but it wouldn't be uncommon for you to still owe $25k.

How could this happen?  Your payment was only $400 a month but now the bank wants $25k!  You are upset, frustrated and blame the bank.  You tell them to eat dirt, your not paying.  But what happens if you don't?

First, please know that they bank must react.  The asset value of your equipment drops rapidly.  They bank lent you the money and in turn paid the dealer for your right to have the equipment.  You cannot count interest.  Your starting balance is what is owed today on the loan.  The Bank is out all of this money, not the dealer.  At auction, another dealer may swoop in, buy your equipment for under fair value and then resell your equipment to another buyer.

Who loses?  The bank does!  But, you signed the personal guaranty, so you must resolve the deficiency otherwise the bank may file a lawsuit.  If you work and/or own property, they do have remedies to reclaim the judgment award. 

At the Price Debt Network, yes, we handle that!  Contact our office today and settle that $25k deficiency for a fair amount.  We understand that it won't be easy, because if it were, the repo would never have happened in the first place.  But since it did, rely on us to negotiate the best possible outcome on your behalf, before it really is too late. 

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