This year LAW Recovery gave back to the community by donating to the Los Aneles food bank.
An unfortunate side effect of recent economic downturns is a significant increase in loan defaults, especially in the new and used car industry. These defaults have prompted a matching rise in demand for the services of experienced, professional vehicle recovery companies. While repossession is never the desired outcome of an auto loan, it is sometimes necessary in order to protect the interests of the lender and to prevent damage or loss to the vehicle used as collateral. Recovery companies work for lending institutions and other financial concerns to locate and bring back these vehicles safely and in a timely fashion, allowing the lender to protect the value of their property.
The financial costs of default
Lenders must bear not only the cost of defaulted loans, but the expenses of recovering their collateral when borrowers fail to make the scheduled payments on their car or truck. Uninsured vehicles present an even greater risk to the lien holder, since these vehicles may represent a total loss in the event of an accident and may even create additional financial liability for the lending institution if it is held responsible for any damages caused by the vehicle. Continue reading
In cases where consumers have purchased a vehicle on credit or with payments over time, the loan is generally secured by the vehicle itself. If the borrower then defaults on the loan by failing to make the agreed-upon payments, the vehicle can be reclaimed by the lender as the collateral for that loan. The resulting process is known as recovery or, more commonly, repossession.
What repossession means
Repossession of a vehicle simply means that the lender is taking back the collateral for the loan. Depending on the terms of the contract, even one day of default or late payment may be sufficient for the lender to begin repossession proceedings. In most cases, no legal action is required in order for the lender to take back the property. Repossession does not end the debt owed by the borrower; even after the vehicle has been recovered and sold at auction, any remaining balance is still the responsibility of the borrower.
How repossession works Continue reading
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