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1.4.2 Advising the Client Facing Repossession

Advising the client who is facing repossession is discussed in more detail in § 6.2, infra. Preliminary issues include:

  • • Can the debt be refinanced with a credit union or another low-rate lender, so that the client can afford the payments and avoid repossession? Should the client consider canceling optional insurance and service contracts in order to reduce the amount that will need to be refinanced? See § 6.2.2, infra.
  • • Would it be advantageous for the debtor to sell the collateral privately to another buyer? Will the creditor cooperate with such a plan? See § 6.2.1, infra.
  • • Has the client previously filed for bankruptcy or is filing for bankruptcy advisable? See Ch. 8, infra.
  • • Should the debtor object to the repossession when it occurs, or store the collateral in a locked garage or secured area? Creditors who proceed with a repossession under such circumstances may be found to have breached the peace. See § 6.4, infra.
  • • If repossession is unavoidable, should voluntary surrender be considered as a way of reducing repossession expenses? If the debtor voluntarily surrenders the collateral, will the creditor agree to submit a less damaging report to credit reporting agencies or make other concessions? See § 6.2.1, infra.
  • • Is there unsecured personal property in the collateral that the debtor can remove, so that it will not be taken along with the collateral? See Ch. 7, infra.

Any client facing repossession should be advised:

  • • Not to resist the repossession;
  • • To arrange, if possible, for others to witness the repossession; and
  • • To open and save all correspondence and documentation relating to the repossession, including the postmarked envelopes.

The consumer should also be advised about any criminal laws that apply to resisting repossession attempts or concealing collateral. See §§ (general), 14.3.9 (rent-to-own transactions), infra.