Missing Payments on a Secured Loan

If you miss payments on a secured loan, the asset named in the loan contract is at risk of repossession by the lender. Your lender may be flexible regarding missed payments, for example, they may not punish you for the first payment missed, but may take legal measures to acquire your property if you miss several consecutive payments. If your assets are repossessed and sold by your lender and the money raised from the sale does not cover the amount you owe, you will continue to be liable for the remaining balance.

There is a considerable legal process that the lender has to go through in order to repossess your assets, and if you keep the lender informed about your financial situation, you may be able to negotiate an informal mutually beneficial agreement. If you are worried that you cannot meet your repayments, and negotiations with your loan provider fail, you may wish to contact an advisor at your local Citizens Advice Bureau for further assistance.