Default

Question 1

Self-Help

Answer 1

Upon default, the secured party is entitled to take possession of the collateral without judicial process if they can do so without a breach of the peace. If they breach the peace, the lose authorization to repossess and can be sued.

Question 2

Breach of Peace

Answer 2

Any conduct by the secured party that has the potential to lead to violence is a breach of the peace. Generally physical presence by debtor plus a verbal objection is sufficient.

Question 3

Foreclosure Sale

Answer 3

Every aspect of the sale must be commercially reasonable and the seller must show they made an effort to obtain the best price.

Question 4

Failure to Comply

Answer 4

Failure to comply with foreclosure rules will make the secured party liable for actual damages and there is a rebuttable presumption that sale proceeds equal the amount of debt such that the secured party loses any deficiency. There is an additional penalty if the collateral is consumer goods.