Repossession of Collateral

Question 1

When is a secured creditor allowed to take possession of collateral?

Answer 1

UCC §9-609 gives the secured creditor the right to take possession immediately on default.
• (a) After default, a secured party: (1) may take possession of the collateral; and (2) without removal, may render equipment unusable and dispose of collateral on a debtor’s premises under Section 9-610.
• (b) [Judicial and nonjudicial process.] A secured party may proceed under subsection (a): (1) pursuant to judicial process; or (2) without judicial process, if it proceeds without breach of the peace.

Question 2

What is a breach of the peace?

Answer 2

• Often if the person says “get off my property”, that is enough to stop the repossession. (Duke v. Garcia)
  
  • Different meanings in different jurisdictions, but if the debtor is resisting the repossession then the creditor may have to stop the repossession.