Repossession of Personal Property After Default

If you default on a loan secured by property, the lender can repossess your property.

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If you default on a loan secured by personal property, the lender can repossess the property in order to get payment on the debt. Examples of personal property that might secure a loan include a large household appliance for which you signed a security agreement or items you bought with a department store charge card that has a security agreement.

(To learn the basics of repossession, see Repossession: When Can a Creditor Take Your Property?)

Personal Property Repossessions Are Not Common

Few creditors try to take back personal property other than motor vehicles, for these reasons:

  • The loan is often for only a few thousand dollars or less.
  • The property may be worth far less than you owe.
  • The repossessor will have a hard time getting into your house.

(To learn about motor vehicle repossessions, which are common, see How Car Repossessions Work.)

Voluntarily Returning Personal Property

A few major department stores encourage debtors to return property. If the property is less than a year old, ask if they’ll credit your account for 100% of what you owe if you return the property voluntarily. This means that your entire balance is wiped out, even if the property is worth less than the amount you owe.

How the Repo Man Gets Your Property

If the lender hires repossessors to take back the property, you don’t have to give it back or let them into your house unless a sheriff shows up with a court order telling you to do so. If, however, the property is sitting in the backyard—for example, a new gas barbecue and lawn furniture—it’s generally fair game. But the repossessor can’t use force to get into your house or to take your backyard furniture—for example, you can’t be thrown out of a lawn chair. Some repossessors will jump a fence or even pick a lock, but most won’t enter the premises unless they are invited or have a court order. Entering your house when you are away with a duplicate key to take your refrigerator or living room sofa is illegal.

The Repossessor Cannot Breach the Peace

A repossession company generally can’t use force to get to your property—repossessions must occur without any breach of the peace. If you or a member of your family ask the repossessor to leave your property, and the repossessor doesn’t, this is a breach of the peace. So is using abusive language or violence or showing up with a gun-carrying sheriff in an effort to intimidate you. But lying or tricking you usually isn’t a breach of the peace.

To learn more about repossession, including information on deficiency balances after repossession, how bankruptcy might help avoid repossession of your property, and whether you can get your property back, see our Repossession of Cars and Personal Property topic area.

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