When a debtor stops making payment on a loan secured by collateral, the creditor has many options for securing their interest. Qualified New Jersey banking law attorneys can review those options with you to minimize the risk of losing valuable assets.
Protection of Secured Debt
When a consumer takes out a loan for certain items such as a car, boat, other vehicle or even a home, that debt will generally be secured by that property as collateral. In other words, the lender will maintain an ownership interest or lien over the property which will provide a powerful collection tool in the event the debtor defaults or stops making payments on the loan. Additionally, it prevents the debtor from transferring or conveying the property without addressing the priority interest of the lienholder.
Writ of Replevin after Default
Replevin is a legalese term that often means repossession. When a debtor stops making payments on a loan secured by collateral, the creditor may have the option of seeking a writ of replevin or repossession in court. These writs require adherence to specific court rules and statutes to be valid so it’s important to seek qualified legal counsel before engaging in repossession of property from a defaulted loan.
Writ of Replevin
Replevin can be conducted either by writ or ex parte. The “normal” course of action would be to have your attorney prepare a motion in court, notify the debtor and schedule a hearing seeking an order allowing seizure of the property in question. The debtor could then file a response and the ultimate decision is, of course, left up to the judge.
“Ex Parte” Requests
An ex parte replevin order can also be issued if the creditor fears some irreparable harm to the property that may be precipitated by giving the required advance notice or the delay in awaiting a hearing on the matter. In that case, the judge has the power to issue the replevin order without the hearing. This would allow the creditor to take the immediate next step of putting the replevin order in the hands of the sheriff or other appropriate authority to carry out the physical seizure of the property.
Time Is of the Essence
The longer a creditor waits to take action on a defaulted loan, the more risk they may face in terms of damage, depreciation or disappearance of the property in question. Contact a skilled banking attorney to help you understand your legal options and take an aggressive stance in protecting your assets. Your attorney can advise you of other options for debt collection as well.
It’s important to understand all the legal means by which you can pursue collections for defaulted loans. The longer you wait, the fewer options you may have available to you. Trust your case to an experienced New Jersey banking lawyer at the offices of Snellings Law LLC. To get started, schedule an appointment by calling 973.265.6100.