You're Behind On Your Payments For A Business Aircraft — What Should You Do Next?Share
An aircraft is a major investment. One that you use either fully or partially for business purposes can be an even more crucial asset. Unfortunately, aircraft are also expensive, and it's easy to fall behind on required payments. As with any other collateral, the lender can initiate repossession proceedings for your aircraft once you're delinquent on your payments.
While aircraft repo operations are complex, the teams who carry out this work are highly skilled and capable. In other words, you'll likely lose your plane if you ignore the problem for too long. Instead, there are a few critical things you'll want to do. These three steps may help you avoid repossession or, if it's inevitable, minimize your loss.
1. Contact a Repossession Attorney
If you've received notice from your lender that they may pursue repossession, your first step should always be to contact an attorney. Since airplanes are such valuable assets, you'll want to contact an attorney specializing in this form of repossession. Attorneys who only deal in lower-value assets (such as cars) may be less able to help you.
Note an attorney won't necessarily be able to prevent a repossession. If you're behind on your bills, your lender typically has a legal right to reclaim their property. However, working with an attorney as early as possible can help you understand your options so you can choose the best one for your situation. The sooner you contact one, the more time you'll have before the lender comes for your plane.
2. Contact Your Creditor
If you can immediately pay back your late balance and plan to do so, contacting your credit should be your first step. However, many credits will be less willing to work with you directly if you cannot make good on the money you owe. As a result, it's often better to wait until you're working with a lawyer to start negotiating with your lender.
The reality is that airplane repossessions are often complex and expensive, so most lenders will prefer to avoid them when possible. Your lawyer may be able to discuss alternate options for you to keep your plane as you work your way back into good standing. If you use your plane for business purposes, keeping control of it may be particularly critical.
3. Document Everything
Finally, if you can't avoid a repossession, it's crucial to rely on an attorney to help you carefully document and observe the entire process. One of the most substantial risks with depreciation comes from deficiency lawsuits. If the lender believes they cannot recover the full value of your aircraft's loan, they may attempt to sue you or your business for the remaining balance.
In many cases, you can defend yourself against some or all of these deficiency claims, but doing so yourself can be challenging or impossible. By working with a lawyer throughout the entire process, you'll stand the greatest chance of minimizing any additional financial damage from having your plane repossessed.
To find out more, contact an airplane repo attorney.