Repossessions and How Skagit County Bankruptcy Attorneys Can Help

Skagit County, Washington, is nestled between the Puget Sound waters and the breathtaking foothills of the Cascade Mountains. But even in an area as picturesque as this, financial challenges can arise and lead to situations like repossession.

Facing a repossession in Skagit County and not sure what you can do? It is important to understand the process when you have valuable property at risk of being taken. Let’s explore Washington repossession laws, strategies to prevent repossession, and how local Skagit County bankruptcy attorneys with decades of experience can step in and help.

A repossession occurs when a creditor reclaims property due to missed payments or a breach of contract. This typically involves secured loans, where the purchased item—such as a car—is used as collateral. Common types of repossessions include:

• Vehicle repossession for auto loan
• Home foreclosure for mortgage default
• Equipment repossession for business-related expenses

Washington state has specific laws governing these repossession types, designed to balance the creditor’s rights with consumer protections.

Washington has clear laws to ensure that the creditors follow legal procedures. Here are some of the more important statutes you would want to understand during this process:

• RCW 62A.9A-609: This allows creditors to repossess property without going to Skagit County court, provided they do not breach the peace (e.g., no force or threats).
• RCW 62A.9A-610: Creditors must handle repossessed property responsibly. This means sales or disposals meet fair market standards.
• RCW 62A.9A-614: Before selling repossessed property, creditors must notify debtors about the sale and how the proceeds will be applied.
• RCW 62A.9A-623: Debtors have the right to reclaim repossessed property by paying the loan balance plus repossession costs before it is sold.

You will find more information on each of these statutes and what to expect below.

Aside from property loss, a repossession could involve other significant consequences:

• Credit Score Damage: A repossession negatively affects your credit score and can stay on your credit report for up to seven years.
• Deficiency Balances: If the sale of the repossessed item fails to cover the debt, you may still be liable for the difference.
• Lifestyle Disruption: Losing a car or home can make commuting, working, or caring for your family harder.

Yes, filing for bankruptcy can stop a repossession immediately. This is due to the automatic stay, which halts all collection actions as soon as the bankruptcy is filed.

While a Chapter 7 bankruptcy discharges unsecured debts, it may not permanently stop the repossession of secured debts. However, it can give you breathing room to negotiate or catch up on missed payments.

On the other hand, a Chapter 13 bankruptcy allows you to create a repayment plan to address missed payments over some time. This can be a powerful tool for preventing repossession.

While bankruptcy certainly is a solution, there are more proactive steps you can take to avoid the repossession altogether.

Let your creditors know you are struggling and are unable to make payments. Many are willing to negotiate new terms to help your accounts stay current.

Refinancing can reduce your monthly payments and make them much more manageable.

Credit counseling services can help you create a repayment plan and negotiate with creditors.

Knowing the terms of your loan, including repossession clauses, helps you anticipate risks so you can act accordingly.

If your property has been repossessed, don’t panic. There are still steps you can take to regain control. Start by requesting documentation from the creditor to obtain a detailed inventory of the repossessed property. This ensures you have accurate information about what was taken.

Next, verify that the repossession process complied with all Washington state laws. Any legal violations could ultimately end in your favor. You may also explore the option of redemption, which allows you to reclaim your property by paying off the loan balance and any fees.

Finally, consult a Skagit County bankruptcy attorney who can provide you with valuable guidance. An attorney can help you evaluate all your available options, challenge unlawful repossession practices, and find alternatives to recover your property or protect your rights.

Creditors are legally required to provide you with certain notices and information like the Notice of Sale or Disposal. Under RCW 62A.9A-614, they must send you a written notice before selling or disposing of the repossessed property. This notice should include:

• The date, time, and place of any public sale
• The minimum bid amount or terms of the private sale
• How the proceeds will be applied to your outstanding debt

Failure to provide notice means the repossession does not comply with Washington law, giving you grounds to challenge it.

There are several legal requirements creditors must abide by in any repossession process.

• Breach of the Peace: According to RCW 62A.9A-609, creditors can repossess without a Skagit County court order but cannot breach the peace. For example, they cannot use force or threats or enter your home or locked garage without permission.
• Handling Personal Belongings: If personal items were left inside your repossessed vehicle, the creditor must return them. Refusal to return the items may constitute a rights violation.
• Commercial Reasonableness: Any sale of repossessed property must be conducted in a commercially reasonable manner as per RCW 62A.9A-610. This means if the sale price seems unreasonably low, you might have grounds to contest the deficiency balance or even sue for damages.

In Washington, you have the right to redeem your property before it is sold. Under RCW 62A.9A-623, redemption requires that you pay the remaining loan balance, any late fees and accrued interest, and all repossession costs, including the towing and storage fees. While this can cause more financial strain, it is the fastest way to recover your property if you can successfully arrange the funds.

If redemption isn’t an option, consider negotiating a reinstatement plan with the creditor. Many lenders prefer to avoid selling repossessed property and may even allow you to resume payments by covering overdue amounts and related fees. Some may even agree to modify your existing loan terms to make your future payments more manageable.

Another big concern you may have is what happens if the repossessed property sells for less than you owe. In Washington, creditors can go after you for the difference. This is known as a deficiency balance.

For example, if you had a car loan balance of $15,000 and your repossessed vehicle sold for only $10,000, you may still owe the $5,000 difference plus any applicable fees and interest. However, if you don’t believe the sale was conducted properly or the sale price was unreasonably low, you can challenge the deficiency in Skagit County Court.

Some people worry about harassment from creditors after a repossession. This is where the Washington Collection Agency Act (RCW 19.16) and Fair Debt Collection Practices Act (FDCPA) come in. These state and federal laws will protect you from abusive collection practices.

If you experience any kind of harassment, you can file a complaint with the Washington State Attorney General’s Office or sue the creditor for damages.

Repossession is a stressful and complex process, but Washington state laws provide many protections and remedies. Knowing your rights, acting quickly to reclaim your property, and seeking professional legal help can make all the difference.

A skilled attorney can help you assess legal violations, explore your bankruptcy options, and even negotiate repayment or settlement terms on your behalf so you can achieve better results than if you were acting alone.

Washington attorneys have a deep knowledge of local laws and are familiar with state-specific statutes and local court practices. They can offer you more tailored solutions based on your unique circumstances. Plus, their established relationships with local creditors and courts can ultimately streamline the process, which involves negotiations and legal proceedings.

If you’re facing a repossession, reach out to a Skagit County bankruptcy attorney to explore your options and regain control over your financial future.