When you buy a car, furniture or appliances on an installment plan, the dealer or store usually takes a “security interest” in the item you are buying. This means that while you are paying for it, the creditor (person or business to which you owe money) can take back or “repossess” your purchase if you break your promises under the contract. If you buy a car, for example, the dealer or bank from which you borrow money to pay for the car usually takes a security interest in the car. Then, if you don’t make the monthly payment or if you don’t keep the car insured, the creditor can repossess the car. Not all purchases can be repossessed. For example, credit card purchases usually can’t be repossessed. To find out whether the creditor has a security interest and can take back your purchase, check your contract. If the paper you signed when you bought the item includes a security interest, there may also be a “grace period”. A grace period is an additional amount of time for making a payment after it is due. However, if you don’t pay during this grace period, the item you bought can be taken back (repossessed). On the other hand, when you make a credit card purchase, there is usually no security interest in what you bought and it cannot be taken back if you are late making a payment. The law says that the creditor cannot come into your house without your permission to repossess personal property such as furniture or appliances. If someone tries to break into your house or garage, call the police. If someone claims to have legal papers, call a lawyer. If you leave your car parked in front of your house or in your driveway where the creditor can find it, the car can be repossessed easily. If a creditor threatens to repossess personal property, it is probably a good idea to talk to a lawyer. It is easier to prevent a repossession than to get your property back after it has been repossessed.
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