Repossession and the Self-Help Collection Method

repossession self-help collections

“Self-Help” refers to the collection method where property of a debtor may be taken without going to court. Traditionally, self-help can be taken if a debtor is in default for payment and without notice to the debtor. The usual methods of self-help are by “set-off” and repossession.

Set-off is a creditor’s right established by common law through the ages to apply property of the debtor it holds against an unpaid delinquent debt. Typically, this occurs in a case where a financial institution is holding funds in a checking or savings account. The funds may be taken and applied if the debt is in default.

Repossession involves the taking of property pledged as collateral toward payment of an outstanding debt. It is considered “self-help” because it can be done with court intervention. Repossessed property can be sold with the proceeds applied to the amount owed. The Uniform Commercial Code has established procedures for legal repossession and most state follow these guidelines. Repossession must be done without a “breach of the peace”, meaning there cannot be a disturbance. This is why most vehicles get taken in the middle of the night. Also, if the collateral is worth less than the amount owed the laws require notice following repossession and the sale of the collateral be “commercially reasonable”. The notice typically gives the debtor time of sale and the requirements to redeem the collateral. The sale is commercially reasonable if it is common for the type of collateral involved and is fair. It does not mean the best price possible is obtained. Notice of the deficiency amount owed may be required after the sale. If a creditor does not follow the legal requirements for notice and sale, the right to a deficiency will be forfeited.


Thomas K. Sciarrino, Jr., Esq. is a veteran collections attorney with 38 years of experience in handling Commercial Litigation, Collections, and Creditor’s Rights. He is the head of the collections department at Wetherington Hamilton, P.A. In addition to practicing law, he has also lectured on creditor’s right before various business and professional groups. He can be reached at (813) 676-9082 or by email at

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