If you are a company that lends money against collateral, sooner or later you will have a borrower that falls on hard times and defaults on loan payments. Repossessing the asset a house, a car, a piece of furniture or maybe a TV is an option if the borrower does not heed to your warnings and is unable to catch up with the payments. Most companies do not carry out the repossession themselves but hire a repossession service to recover the asset.
How do I select a repossession service?
Following is a list of questions to consider:
* Is the repossession service bonded and have wrongful repossession insurance? It will help you in case of a lawsuit.
* Does the service have insurance that offers protection against damage during repossession?
* Does the repossession company have a license to operate in the state the asset is repossessed?
* Are the repossession agents familiar with the local law to avoid any accusations of illegal repossession or trespassing?
* Does the company have a good standing with the Better Business Bureau or the local rating agency?
* In case the item to be repossessed is hidden, does the company have investigative resources to track down and recover the assets?
* Is the cost of the repossession service lower than the value of the asset? If not then it makes more sense to write off the asset or find a cheaper service.
How much does repossession service cost?
Cost of repossession depends on the asset to be possessed and the level of difficulty. Low price is important but it should not be the sole criteria when considering repossession firms. To get the best deal compare price quotes from multiple Repossession Services firms.
Some legal issues to consider while repossessing an asset.
Before you start the repossession, check the contract you have with the borrower. To avoid any legal trouble, be sure it says that if the borrower does not pay the loan, he or she will lose the asset. Call or write a certified letter to the borrower that you will repossess the asset if he or she does not catch up on the payments within the stipulated time.
Your repossession agent has to carry out the repossession within the law. No illegal act can be committed to repossess the asset, for example illegal entry to a property or the garage. Your agent should also be careful not to cause any damage during the repossession or you may be liable for it. The only asset that can be repossessed is the one that is collateral for the loan. For example, you cannot repossess the trailer with the truck if the borrower does not owe you money for the trailer.
Once the asset is repossessed the borrower may call the police to report it as theft. It is important that you or your repossession service agent call the police and inform them immediately after the repossession is completed.
Hiring the right professional repossession service is a must to ensure legal and hassle free repossession.
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