Asked by stephan vailes on May 12, 2024
Verified
What rights,if any,does a creditor who does not wish to repossess collateral have in the event of a default,and why might a creditor prefer a remedy other than repossession of the collateral?
Repossession
The act of a creditor or lessor taking back goods or property from the debtor or lessee, usually due to failure to meet the terms of an agreement.
Default
Failure to fulfill a legal obligation, especially the failure to pay back a loan on time or to meet the terms of a contract.
Collateral
Property or assets pledged as security for a loan, which can be seized by the lender if the loan is not repaid.
- Acquire knowledge regarding the operations and effects of repossession in secured transactions.
- Assess the rights and responsibilities of stakeholders in transactions underpinned by personal property.
Verified Answer
RG
RIVAS GABRIELAMay 14, 2024
Final Answer :
Rather than repossessing the collateral,a secured party can sue the debtor for the entire amount of the debt.That may be preferable to organizing a sale of collateral,particularly if the collateral is worth little.Additionally,repossession may be difficult.Students may also have other ideas on the issue.
Learning Objectives
- Acquire knowledge regarding the operations and effects of repossession in secured transactions.
- Assess the rights and responsibilities of stakeholders in transactions underpinned by personal property.