When a borrower defaults on a loan, the lender has the legal right to repossess the collateral used to secure the loan. While cars are often the primary asset involved in repossession, there are various other types of property that can be subject to this process.
Repossession of Personal Property
Repossession can apply to a wide range of personal property, including:
Vehicles (cars, trucks, ATVs, RVs, boats)
Jewelry
Artwork
Furniture and electronics (from rent-to-own agreements)
Appliances
Repossession of Real Estate
When a borrower defaults on a mortgage or home loan, the lender can initiate a foreclosure process to repossess the property. This is known as a real estate repossession or foreclosure.
The Repossession Process
The repossession process varies by state and the type of collateral involved. Lenders typically must provide the borrower with notice and an opportunity to cure the default before they can legally repossess the property. Once repossessed, the lender can sell the asset to recoup the outstanding loan balance.