Falling behind on your monthly payments of your secured debts can lead to the repossession of the underlying asset such as your car, furniture among others. In Massachusetts the law provides that only a default on your monthly payments can lead to the repossession; nonetheless the lender is required to wait for 10 days after the due date of your payment before proceeding to repossession and after the 10 days serve the borrower a written notice informing the borrower to make his/her payments within at least 21 days in order repossession. (Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act).
Before repossession
The first and obvious way to stop repossession is by paying the missed repayments within the 10 and 21 days allowed by the law and by doing so the creditor will have no reason to go ahead with the repossession. It is good to note that if your lender has served you with multiple notices of default on the same loan after the 3rd one he/she will no longer be required to issue you with a notice in the subsequent repossessions.
In the course of repossession
If you don’t pay your missed monthly payments, your lender can directly or indirectly through a separate company acting on their behalf, repossess your property. However the company is required not to apply force or not to commit a breach of peace during the repossession and not to repossess from the borrower’s premises whether it’s their own or rental without the consent of the debtor. The second way to prevent repossession is to proof the infringement of peace by the company or its repo man however for this to happen a court hearing must be held first to determine these allegations.
After repossession
The lender is required to hold the reposed property for at least 20 days before selling it. This provision allows the debtor an additional 20 days to redeem the asset. Where the debtor can save his/her property by (1) paying all the arrears and the repo’s fees or the total debt owed if the creditor demands so or (2) or file chapter 13 bankruptcy and which is the only way a borrower can compel the lender to return the property without any money exchanging hands. The downside of chapter 13 bankruptcy is that the attorney’s fee and costs must be raised sooner before the end of the 20 days which may be difficult for some borrowers to do and the brighter side is that after filing chapter 13 the borrower might end up paying less amount than the market value of the asset but this applies only to the assets acquired 2 years and a half (910days) before the bankruptcy petition.
Chapter 13 will help you become current on your debt, probably reduce your interest charge or the debt amount and allow you to keep the property in your domain. However, despite the fact that chapter 7 is a liquidation type of bankruptcy there are also chances that exist in it that can allow you to keep the car/furniture therefore be advised to consult a lawyer so as to be in position to select wisely the best option for you scenario.
Sources
http://www.forghanylaw.com/Bankruptcy-Overview/Prevent-Repossession.html
http://www.culiklaw.com/know-your-rights-massachusetts-auto-repossession-laws/
http://bkmass.com/car-repossession-massachusetts.asp