Serving Clients Throughout Upstate South Carolina

Serving Clients Throughout Upstate South Carolina

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Understanding reasons for repossession

On Behalf of | Nov 27, 2023 | Foreclosure/Repossession

Lending agreements can be complex and difficult for borrowers to understand. However, it is important to become familiar with the terms for repossession.

South Carolina law allows lenders to seize secured assets in certain circumstances.

Late or missed payments

If you consistently miss payments on a secured asset like a car, your lender can pursue repossession. This step lets them recover the outstanding debt by selling the vehicle. You can avoid this situation by making regular payments and communicating with your lender if you fall behind.

Failure to maintain insurance

Secured loans often require the borrower to maintain insurance coverage. Failure to do so may be grounds for repossession, as it puts the lender’s investment at risk.

For example, an auto lender can seize your car if you do not carry the minimum amount of auto insurance. Doing so protects their investment in the vehicle.

Breach of specific conditions

Some loan agreements have unique terms and conditions. Borrowers must carefully review and adhere to all terms outlined in their loan agreements. Awareness can help you avoid potential repercussions including repossession

Deceptive practices

Fraudulent activities, such as providing false information in the loan application, can lead to repossession. Lenders have the right to take action if they discover that borrowers obtained the loan through deceptive practices.

Demonstrating inability to pay

If you lose your job or experience an income decrease, it can affect your ability to keep the loan. Some contracts allow the lender to repossess property if the borrower’s financial circumstances decline.

In the fourth quarter of 2023, the U.S. reached the highest rate of past-due auto loans in 27 years. Understanding conditions for repossession can help you maintain financial stability in this situation.