When a creditor repossesses your property, it must do so in accordance with the laws of your state. Repossession typically occurs after a debtor falls behind on loan payments. Talk to a Virginia attorney if you need legal advice or assistance with a repossession problem.
Right to Reposssess
A creditor's right to repossess property depends on whether the creditor is secured or unsecured. A secured creditor is one that takes a security interest in your property when it gives you a loan, while an unsecured creditor does not. For example, when you take out a car loan to buy a car, the lender usually takes a security interest in the car. This means the lender has a legal interest in the car as collateral and can take the car to satisfy the debt if you fail to make payments.
A creditor can repossess secured property once the borrower defaults on a loan. The terms of default differ based on the terms contained within the loan agreement, but in general a borrower defaults once he misses a payment or is delinquent on payments for a minimum period of time, such as 60 or 90 days. Once in default, the lender can repossess the secured property.
While a secured creditor has the right to repossess property once the debtor falls into default, the creditor must do so peacefully. For example, the creditor cannot commit a crime, such as breaking and entering, while attempting to recover its property. It can, however, use any legal method to retake the property. For example, if a creditor wants to repossess a car, it can use a locksmith or other method to bypass the car's locking system. This is not a crime, because the creditor owns the car and is allowed to take it back.
A foreclosure is a kind of repossession, as it involves a creditor taking possession of a debtor's property -- a house or other form of real estate -- once the debtor defaults on a loan. However, Virginia has specific laws that apply in foreclosures. Virginia allows for both judicial and nonjudicial foreclosures, meaning a lender can either file a foreclosure lawsuit and ask the court to grant its request to repossess the home, or can repossess the property without having to file a lawsuit.