Collateral loans

by Melissa

My husband took out a collateral loan with Patriot loan company while in the Army in Georgia last year. He has since been medically discharged and has a 60% disability rating with the VA. We now live in Indiana and he has been out of work and not able to repay his loan. He is currently enrolled in trade school and has been getting calls from the company telling him that they can take the things he put down as collateral and that he can be in trouble because the items were taken from the state of Georgia. Can they really do this or is there a loophole of some kind? He is so scared they will take his stuff that he has agreed to $60 payments that he really cannot afford right now.

Reply from

We are so sorry to hear what your husband has gone through.

Typically, if there's collateral for a loan, then that collateral can be repossessed if the loan goes into default. You can certainly look at the contract to see what it says about repossessing the collateral.

You may also want to take a look at the protections offered under the Servicemember’s Civil Relief Act to see if there any protections that may apply in this case.

We don't know what kind of collateral your husband is worried about losing, but in many cases the lenders really don't want the collateral, they just want the loan to be paid. And we have to warn you that even if they take the collateral, they may still be able to try to collect the difference between what the collateral is so for and what he owes.

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