In many situations, leasing is closer to the truth of an asset experience than owning. In some situations, like leasing a car, this is obvious; however, in other situations, like the process of buying a house, it might not be as obvious. When you make a large purchase that requires you to take out a loan, you’re often doing something similar to leasing.
This leads to what happens if someone misses a payment on their loan. In these cases, they’ll end up running into asset repossession. The creditor, who’s the one who loaned the lender the money to buy the item, may be able to take the item back to sell it. This repossession process may be more or less straightforward depending on the item and the contract.
When someone takes out a loan, they typically have to have some sort of collateral for that loan. Often, the collateral is the item they’re taking out the loan for; when you buy a house, the bank uses that house as the collateral for your loan. If you miss enough payments on your asset, which may be as few as a single payment for a car or as many as three to six payments for a house, the creditor is legally allowed to take back the collateral. That’s called asset repossession.
It depends on the exact circumstances of the asset repossession. Most of the time, asset repossession happens through many behind-the-scenes decisions. A house, for example, is not something you can typically load onto a truck and drive away. Instead, when it comes to very large assets, you’re more likely to see things like evictions and removal of rights in court.
In an initial contract for anything that could eventually result in asset repossession, a lender will see information about what will happen in the context of repossession. That’s why it’s important to work out all the necessary elements of the repossession process upon first signing the contract.
Both parties have certain rights and obligations during the asset repossession process. The creditor has a variety of rights, which may include:
Although there are fewer rights a lender has, the lender does still have certain rights in the eyes of the law. These rights may include:
If you’re working on asset repossession in any way, you might want to use Enformion to help speed up the process. Asset repossession is much more complicated when you don’t know where someone is—if someone’s skipped town, you’re going to need to track them down before you’re able to repossess any of the items they currently have. Enformion can help with this problem and many more. If you’re dealing with asset repossession, Enformion should be one of the first tools you consider.