Repossession is the process in which a creditor takes possession of a debtor’s personal property, upon the debtor’s default on a contract or loan. The type of creditor that can repossess personal property is known as a secured creditor. To be a secured creditor is to have an interest in the personal property as collateral. Personal property subject to repossession can be any tangible item of value that can be bought and sold in a marketplace.

Do I Need to Allow A “Repo Man” Into My House?

A “repo man,” or “repossession man,” is a distinct figure in the public imagination. This person, in the public consciousness, enters a person’s home, by stealth and usually at night, to repossess an item of personal property. The “repo man” is thought of as an individual who can break doors and windows to get to the property for which repossession is sought. The repo man can, in the public imagination, even commit violence.

In reality, this “repo man” does not exist. It is true that a creditor can send a representative to your home. This person can attempt to repossess the property. However, the person cannot force themselves into one’s home. The right to repossession is created by contract. This right is spelled out either in the loan agreement or lease agreement. These agreements provide that if a debtor misses a payment for the item leased, the creditor has the right to repossess the property. This means that if the debtor defaults (misses a payment), the creditor can reclaim the property to satisfy the debt.

A creditor may not create a breach of the peace in an attempt to repossess personal property. In other words, the creditor may not cause a public disturbance by engaging in disruptive behavior such as banging loudly on a door for hours upon end. The creditor may not shout out threats to the debtor. The creditor must attempt to repossess property in an orderly, lawful manner.

Law enforcement alone has the right to enter someone’s home to repossess personal property. A sheriff or marshal accompanies the creditor’s representative. If the sheriff approaches with a court order that gives the sheriff the right to repossess the property, the debtor must let the sheriff enter to reclaim it. A creditor must apply for this court order. Usually, such orders are granted only after prior attempts by the creditor to repossess have been unsuccessful. Sometimes, a court will issue the order if the property for which repossession is sought is highly expensive, such as a luxury car or an art collection.

Debtors may note engage in acts that make repossession physically impossible. For example, if a debtor is given proper notice that the creditor intends to repossess, the debtor may not hide the personal property. If the personal property is a vehicle, the debtor may not conceal the vehicle, store it at an undisclosed location, or otherwise prevent a creditor from physically accessing it. Debtors may not destroy or damage personal property to avoid repossession.

If, for example, a creditor informs the debtor that the creditor will repossess the debtor’s new couch, the debtor cannot destroy the couch. A creditor has the right to repossess the specific item the contract states can be repossessed. If the property is inadvertently destroyed, such as by a fire outbreak or hurricane, the creditor is still entitled to recover the money owed on the debt.

What if I Have Legal Issues Regarding Personal Property Repossession?

When a creditor seeks to repossess personal property, the creditor must follow proper debt collection practices. These practices require the creditor to first give the debtor notice that the debtor is in default. The notice, which must be in writing, must provide that the creditor has the right to repossess the personal property. The amount of notice that must be given depends upon the state where the debtor resides.

Creditors often use debt collection agencies to do the repossession. Debt collection agencies specialize in repossession of personal property and recovery of debts. Debt collection agencies are regulated by state and federal law. These laws prohibit debt collection agencies from harassing or threatening debtors. State and federal laws restrict the hours during which a collection agency may call a debtor about a debt. A federal law known as the Fair Debt Collection Practices Act regulates collection agencies.

Under this law, if a person informs a debt collector they have hired an attorney to represent them over the debt, the collector must thereafter communicate with the attorney. The law also requires debt collectors to verify and validate debts at a debtor’s request. To verify a debt is to state in writing, the name of the creditor, the date of default, amount owed, and other information required by law. To validate a debt is to provide documentation that shows a loan was made, that the debtor knew payment was required, and that payment was not received.

Debtors also have the right to request a payment plan. Many creditors, before resorting to using a collection agency, will attempt to negotiate with the debtor. During the negotiation process, the debtor and creditor work to arrive at a “settlement” figure. This figure is the value that both parties agree will satisfy a debt. The figure often contains a repayment term and an interest rate. A debtor and creditor may agree, for example, that if the debtor monthly repays a fraction of the debt at a certain rate of interest, the debt will then be satisfied.

A written debt settlement agreement is a contract. If the debtor breaches the contract, the creditor can go to court and file a lawsuit to recover the debt owed in the agreement. Creditors may add an “acceleration” clause to a settlement agreement. Under this clause, if a debtor misses a single payment, the entire amount owed becomes due immediately.

Not all debts are subject to repossession. Debts that are unsecured debts are not subject to repossession. The most common type of unsecured debt is credit card debt. If an individual fails to pay credit card debt, the credit card company may not take the individual’s property. The credit card company has no security interest in personal property. The credit card company must go to court, file a lawsuit, and obtain a judgment that the money is owed.

If the debtor fails to pay, the creditor may be able to garnish, or deduct from, a certain portion of the debtor’s wages. However, the debtor cannot take personal property to satisfy the debt. Credit card agreements, which also are contracts, do not permit this remedy.

Are There Defenses to Personal Property Repossession?

Several defenses to personal property repossession can be asserted. If, for example, a debtor can prove the debt was already paid, repossession cannot take place. Another defense is that the debtor does not owe the debt, but rather, someone else does. Another defense is the statute of limitations. Every state limits the amount of time a creditor has to sue to recover personal property.

For example, in Georgia, a creditor has four years from the date the debtor stopped paying to recover the personal property. If the creditor does not make any attempt to repossess the property or to file a lawsuit during that time, a debtor may, if the creditor subsequently sues, raise the statute of limitations as a defense.

Do I Need the Help of a Lawyer With Personal Property Repossession Issues?

If you owe a debt and face potential repossession, you should consult a debt collection attorney. A qualified debt collection attorney near you can explain your rights and options. This attorney can represent you at negotiations and in court proceedings.