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repossession

Repossession is the act by a creditor , or an agent hired by a creditor, to take possession of a debtor’s property that has been put up as a security interest or collateral . This happens when the debtor has defaulted on the debt and has failed to pay the creditor. Although repossession is usually a method of self-help , most states , such as Connecticut , require there is no breach of peace during repossession. 

Additionally, wrongful repossession occurs when the repossession is accompanied by an unjust act. This means that the creditor or agent taking possession of the debtor’s property has violated a legal duty to the debtor. For instance, if a contract requires a creditor to first seek payment before repossession and the creditor does not do so, the creditor’s repossession of the debtor’s property could be a wrongful one. 

[Last reviewed in July of 2021 by the Wex Definitions Team
]

Wex

• PROPERTY

• property & real estate law

• wex definitions

• property law