Unless you have a contract with the person or company that you are suing to collect on a debt, you cannot repossess any property from that debtor. You may only take back or repossess such items if you have included in your contract a provision
giving you the right to repossess. These provisions are generally referred to as security agreements. Before you can repossess in most states, you must record or file your security agreement with the state, which establishes a priority interest in the property secured.
In some cases, the debtor may have to put up collateral before a loan is extended, which in most instances is the car or item being purchased or it may be other property that the debtor already owns before the loan is granted.
Does a Warning Have to Be Given?
For example, when you buy a car with financing, the lender has a provision in the loan agreement that it may take back the car if you fail to make the required payments and may do so without first obtaining a court judgment or even warning you in advance. Depending on your state, there are rules for how creditors may repossess property.
Should you be a lender or business that has sold an item with installment payments, be sure you include in your written contract or agreement your right to repossess the property if payments are not made and be sure to define what constitutes a default that entitles you to repossess the property. You may have to file your financing or security agreements with the state to ensure you can repossess the property if circumstances dictate it.
If you do have a security interest filed with the state, most states require that you give notice before you repossess property. The notice must give the legal basis for the repossession and allow the debtor time to pay off the loan together with your costs and expenses.
Do Not Break the Law
If you do wish to repossess the item, you cannot break any laws in doing so such as by trespassing or by any other breach of the peace. Taking a vehicle or item in a driveway is possible in most instances, but you need to check with a debt collection attorney regarding your state’s laws in this regard.
You may not threaten or intimidate the debtor into relinquishing the property and you may not break into a locked garage or dwelling to retrieve the property.
It is always best to consult with or to retain a debt collection attorney when trying to collect on any debt to ensure no laws are being broken and that you are following all lawful procedures in the repossession process.