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Is there a penalty for changing your address with a loan company to an address that does not exist to avoid repossession?
Wiki User
∙ 14y ago
They'll have the complete address history so it wouldn't gain you anything. If they're looking to repossess, they'll look for the property in all of the addresses they've ever had for you. As for legal ramifications to hiding from them? You'd have to ask an attorney but they have a valid legal claim to that property if the loan is secured against that property. Hiding it and not paying for it is pretty darned close to theft.
If they haven't already started repossession, the best thing you can do to avoid it is to call them and try to work something out. They will generally only resort to repossession if they feel that they will never get paid. The one thing that will spook creditors the most is silence. The only thing they can assume is that you never intend to give them another dime. Call them.
There are many things lenders can do:
- Agree to change or lengthen the term of the loan
- Accept reduced payments from you in the short term
- Add any repayment debt to the amount you borrowed to bring the account current
- Take out another loan to pay off the first
Things you need to do:
- Demonstrate that you are willing and eager to make reasonable payments that you can afford
- Pay what you can, when you can... even if you can't afford to make the full payment
- Get any repayment arrangement you negotiate in writing
- Let lenders know immediately of any changes in your circumstances (unemployment, etc.) that may affect your ability to pay so that you can work out solutions before the problem starts.
As a last resort, you could sell the property. You'll get more money for it than the lender would. Keep in mind that any cash received from the sale of property used as collateral belongs to the lender first. If you sell the property, you are legally required to use the money to pay the loan off. If you sell the property for less than the balance due on the loan, you still owe that money. If you sell it for more than the loan amount, you pay off the loan then keep what's left over.
That's also exactly how it works if they repossess. They'll just sell the property and use the proceeds to offset the loan balance. If they sell it for more than the loan amount (unlikely) they owe you a refund less any repossession costs. If they can't sell it for as much as you owe... you still have a loan to pay off.
Wiki User
∙ 14y ago
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