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Encyclopedia > Repossession

Repossession is generally used to refer to a financial institution taking back an object that was either used as collateral or rented or leased in a transaction. Note that repossession is a "self-help" type of action in which the party having right of ownership of the property in question takes the property back from the party having right of possession without invoking court proceedings. In financial economics, a financial institution acts as an agent that provides financial services for its clients. ... Collateral within a financial context is used to indicate assets that secure a debt obligation. ... Self-help, in the sense of a legal doctrine, refers to a situation where a person implements his rights without resorting to legal writ or consultation of higher authority, as where a financial institution repossesses a car on which they hold both the title and a defaulted note, retrieving one... This article or section does not adequately cite its references or sources. ... The right of possession means that someone currently holds something in hand and this person may be the temporary keeper or the long-term owner of an object. ...

This is usually done in accordance with a purchase contract or credit contract, in which the consumer agrees that the seller (the "lienholder") may repossess the object if the signers are past the grace period (generally for prime lenders the critical number is 30 days late making an installment payment but can vary based on how many payments have already been made, the length of the business relationship, reason why past due, etc.). Contracts that authorize repossession also usually specify additional fines that the consumer must pay to the seller, ostensibly to cover the seller's costs of the repossession and of depreciated value of the object, as the seller is now in possession of a "used" object. Generally lending institutions never want to repossess because the items sold at a wholesale auction and were financed at retail price, hence, a loss is virtually guaranteed. However, the statisticians and accountants have determined that any loan which goes beyond 90 days past due will never again become "current" (up to date on payments) and the collateral continues to depreciate. The term lienholder is usually used in instances of title of a vehicle (such as an automobile) to refer to the person who has right of property of the vehicle, as opposed to the party that merely has right of possession. ...

Repossession is a complicated and legally fraught matter, with legality being determined by widely varying local and state laws. In some jurisdictions, such as the United States, a consumer may avoid repossession of some of his property by declaring personal bankruptcy, throwing his financial arrangements on the mercy of a court, which will usually prevent the consumer's house and, sometimes, his car from being repossessed. Both repossession and bankruptcy are significant negative events on a consumer's credit report. Notice of closure stuck on the door of a computer store the day after its parent company, Granville Technology Group Ltd, declared bankruptcy (strictly, put into administration—see text) in the United Kingdom. ... A credit report summarizes historical financial information collected to determine an individuals or an entitys credit worthiness; that is, the means and willingness to repay an indebtedness. ...

In some places (notably the U.S. State of Wisconsin) self-help repossession is not permitted; the lienholder is required to go to court to obtain an order of replevin. However, in some states, repossession is mandatory and suits of replevin are not permitted. Replevin is an Anglo-French law term (derived from repletir, to replevy). ...

If a lender finds itself in the situation of needing to repossess property while the borrower attempts to avoid this, the dealer may contract the work of repossession out to a repossession agent (colloquially termed a Repo Man, as fictionally portrayed in the film of the same name). Agents appointed by the courts are called bailiffs. For other uses, see Repo Man (disambiguation). ... Bailiff (from Late Latin bajulivus, adjectival form of bajulus) is a governor or custodian (cf. ...

As an unusual provision of law, when repossession takes place, the lienholder has a nondelegatable obligation not to cause a breach of the peace in performing the repossession, or the repossession will be reversed, and the party ordering the repossession will be liable for damages (this provision is unusual in that where a duty can be delegated to an agent, usually the agent is responsible for the misconduct, but the principal who hired the agent is not responsible for the agent's misconduct). This requirement means that whether a repossession is performed by the lienholder or by an agent, the repossessor must not cause a breach of the peace or the lienholder will be held responsible. This requirement not to breach the peace includes even if the breach is caused by, say, the debtor objecting to the repossession or resists the repossession. In the court case of MBank El Paso v. Sanchez, 836 S.W.2d 151, where a hired repossessor towed away a car even after the registered owner locked herself in it, the court decided that this was an unlawful breach of the peace and declared the repossession invalid. The debtor was also awarded $1,200,000 in damages from the bank. Court citation is a standard system used in common law countries such as the United States, United Kingdom, Canada, New Zealand and Australia to uniquely identify the location of past court cases in special series of books called reporters. ...

External links

  • UK Repossession Advice
  • UK Citizens Advice Bureau
  • USA FTC Facts for Consumers on Vehicle Repossession
  • New Zealand Consumer aid in dealing with Repossession

  Results from FactBites:
Redeeming a Repossessed Motor Vehicle (980 words)
The contract holder must, within three days of repossession, provide the buyer with a written statement of the amount due under the contract and the amount due for repossession and storage costs.
If the goods were repossessed through legal process, and an answer is interposed, the contract holder may hold the goods for up to 30 days after the final judgment is entered.
If the contract holder repossesses a motor vehicle with an aggregate cash price greater than $ 2,000, the prima facie fair market value is calculated by adding the average trade-in value and the average resale value and dividing the sum by two.
Section 306-435 Repossessed vessels, motorboats and out (263 words)
The director may, by regulation, prescribe for the inclusion in either or both the application or affidavit required by this subsection any other information that he, from time to time, deems necessary or advisable, and may prescribe that the affidavit required by this subsection be part of the application.
The application for repossessed title may be withdrawn by the applicant at any time before the granting thereof.
Each repossessed title so issued shall, for all purposes, be treated as an original certificate of title and shall supersede the outstanding certificate of title or ownership, if any, and duplicates thereof, if any, on the outboard motor, motorboat, vessel, or watercraft, all of which shall become null and void.
  More results at FactBites »



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