Don't Lose Your Possessions To Repossession

Do you know what could happen if you buy a car or a boat or other large item from a reputable Wisconsin dealer and miss even a single payment? You may wake up to find your property is no longer in your driveway. It has been repossessed by the dealer or creditor.

If a buyer fails to make timely payments on an installment agreement, the creditor has the right to take possession of the property. However, the creditor may not cause a breach of the peace by a physical confrontation with the buyer or cause property damage. Additionally, a creditor cannot keep personal items found inside your boat or car. Tickets to a Brewers game, coupons for Great America, or the binoculars you bought for your trip to the Apostle Islands remain your property. But personal property does not include improvements you made to the boat or car, such as a CD player or a luggage rack.

If your property is repossessed, you can reclaim it by paying the entire balance due, plus repossession charges, attorney and court fees. Meanwhile, the creditor may resell the property and if he receives less than its original value, you can be held liable for the difference between the original price and the selling price.

Say you still owe $3000 on your car. The creditor repossesses it and sells it for $1500. You are responsible for the remaining $1500 and any charges related to repossession. This is called a deficiency; an amount still owed by the debtor after the creditor sells the property.

In the end, you could lose not only the vehicle, but all of the payments you made on the it.

Before reselling your property, the creditor must notify you, the debtor, of the sale and make sure the sale is conducted in a reasonable manner to obtain a reasonable price for the item. If the creditor does not take these steps, then the debtor is not liable for the deficiency between the original price and the resale price. The debtor can also participate in the bidding process and possibly reclaim the property.

If you’re unable to make a payment or a special circumstance forces you to make a late payment, talk to your creditor to explain the situation. Maybe your Wisconsin employer has issued you a layoff notice or you’ve experienced a different crisis that has affected your ability to make a payment. Creditors don’t want the property back and often will work with you and revise your payment schedule.

If you negotiate a payment schedule, aim to stick to it. Until you make that last payment, the property “belongs” to the creditor and can be repossessed if you default in your payments.

Take care you don’t over-extend yourself, make timely payments and you’ll have one less worry when you wake up to a beautiful Wisconsin morning.

Provided as a public service by the Community Bankers of Wisconsin (CBW).