My Furniture was Repossessed! Do I Still Have to Pay for it?

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This time of year can put added stress on your finances, especially if you were already experiencing money trouble before the holidays rolled around. For some struggling Americans, the extra demands of the season can mean complete financial ruin. It’s a horrible time of year to be digging yourself out of a debt pit, but as the saying goes, “There’s no time like the present.”

If you’ve reached critical financial lows, you may have had a repossession company pay you a visit.  Anything that you purchased with credit and have since defaulted on (stopped making payments for) can be repossessed. For example, let’s say two years ago things weren’t looking so bad for you in the money arena so you decided to buy new living room furniture.

What nudged you into taking the leap for a new furniture set might have been the incredible (no down payment, no payments for a year) payment plan that was offered up by the salesperson. Some of your self-talk may have sounded something like:

  • “I can save up a little bit every month until the first payment comes due!”
  • “In a year, I will have gotten that raise at work so the payments will be no problem.”
  • “A year is a really long time. This is like getting free stuff!”
  • “I’ll worry about this later.”

It is frightfully easy to take home expensive items with generous lease-to-own or no money down payment plans. The trouble naturally will catch up to you, when the payments come due. If you’re not prepared and fail to make your payments on time (or at all) – what can happen?

Failure to hold up your end of the payment agreement for items like furniture, vehicles and other big purchases often leads to the company repossessing the item(s) for which you have not as of yet made any payments. Repossession is exactly what it sounds like: the company to whom you are indebted will hire a repossession firm to come to your home where they will take back the furniture that you haven’t paid for.

What happens after repossession?

The business that sold you the furniture will attempt to re-sell the (now used) pieces to recover at least some of the money they lost. You have no further rights to the furniture once it has been repossessed.

Will I still be liable for the payments?

After your furniture has been repossessed and sold, it is very likely that you will be charged for the difference between the used furniture’s sale amount and how much it was originally worth. This is called a deficiency. At that point you will be responsible for making payments on assets that someone else owns. This is not a desirable situation for anyone.

How will this affect my credit rating?

A repossession, or “repo” listed on your credit report can be quite detrimental to your credit score, so taking action now is imperative. You may have several potential defenses that a credit repair attorney can use to eliminate or reduce your deficiency liability. Filing for NJ bankruptcy is also an option that can help you turn things around if you don’t have any defenses (good reasons) for defaulting on your payments.

Image credit: Paragon Apts

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