Property Creditors Can Repossess

Repossession happens when you defaulted on a loan and the creditor takes a property of yours as a means of settling your debt.

The car is the most common item you see getting repossessed, and not only is it embarrassing but it’s also quite stressful as you don’t know what they’re going to take next.

To help take the guesswork out of the situation, we’ve listed the potential items creditors can take from you and conditions where they are allowed to take such items.

Properties That Can Repossessed:


As mentioned earlier, creditors can repossess your vehicle if you’ve defaulted on the car loan. What constitutes as a default entirely depends on your contract. Sometimes, it’s not just because you missed to pay the agreed monthly amount but also that you failed to maintain the car’s insurance.

In some states, creditors are not required to notify you that they’ll repossess your car. Often times, people are surprised to find that their car has disappeared from its original spot only to find out later that it’s been taken for repossession.

Rent to own items like electronics, appliances, and furniture

These items are used as collateral to ensure you continue paying. However, once you default on the loan, lenders can take away the item from you.

Jewelry, artwork and other tangible assets that can be sold

Other items that are off value can also be repossessed by the lender. Again, if you used these items as a means of securing a debt, they can also be repossessed.

Real estate

If you missed making payments on your mortgage loan, the lender can repossess your home. This is called foreclosure and it is not good at all. You end up losing your home unless you find a way to settle it.


If you have regular employment, creditors can collect your dues via salary deduction. This requires court judgement of course and you will be notified. Typically, 25% of your salary is deducted every payday to go towards paying your loan. This percentage remains the same regardless of you how many lenders you owe money to.

The key to finding out whether an item is up for repossession is collateral. No debt, except for credit cards and personal loans, goes approved without a collateral to secure it. This is why it’s important to go through your contract. Check every single detail and take note of the items that you agreed to use as collateral as these could possibly be taken away from you in the case that you default on your loan.

Properties That Cannot be Repossessed

If a specific item is not named as collateral in a contract, the lender has no right to repossess it. Unsecured loans such as credit cards and personal loans typically do not require collateral so in the case that you miss making your payments, lenders cannot repossess items you purchased using the loan.

However, there is such a thing as security interest. It’s very rare for credit card companies to have this but it does happen. They’ll send you a contract stating that they legally own items you’ve purchased with the card until you pay your debt. And if you’re not diligent with your payments, they can take away these items from you.

Once the item has been sold, you will still be responsible to pay for the deficiency. This is the difference from the amount you still owe on the loan and the amount the property was sold for. You may want to hire the services of a repossession lawyer who will help you go through this process. They’ll be able to defend your basic rights as well as lower those settlement fees.

Property repossession is never good but it does happen to the best of us. What you can do though is deal with it immediately so you avoid prolonging the stress and minimize the strain your credit report.

Got any interesting stories of repossession? How was it resolved? Share your stories in the comments below!