UCC 9-604 enforcement rights - when can secured party take control of collateral?

The security agreement includes standard default provisions and gives us the right to take possession upon default. The equipment is in an open warehouse area, not locked up separately. My concern is whether the debtor being on-site during business hours would constitute potential breach of peace.

If they're actively objecting or might physically resist, that's a red flag for breach of peace. Many lenders coordinate with professional repossession services who understand these boundaries. You might want to attempt contact first to see if they'll cooperate with voluntary surrender.

That's smart about the after-hours approach. Did you have to give any advance notice to the debtor before repossessing?

No advance notice required under 9-604 for repossession itself, but you do need to follow the notice requirements for any disposition of the collateral afterward under 9-611. That's a separate step.

Wait, I thought there were state-specific notice requirements for repossession too? I'm in California and our counsel always insists on pre-repossession notices.

Good point about verification. Our UCC-1 was filed three years ago and covers "all equipment now owned or hereafter acquired" so I think we're covered, but I should double-check the filing details.

Definitely worth checking. The Certana tool is pretty straightforward - you upload your security agreement and UCC-1 filing and it flags any inconsistencies. Better to catch problems before attempting repossession than after.

This is exactly right. The breach of peace standard varies by state but generally means no physical confrontation, no breaking and entering, and no actions that might provoke a disturbance. Business hours repossession can be tricky if customers or employees are present.

We're in Texas, so I should research the specific breach of peace standards here. The manufacturing facility does have employees working during the day, which might complicate things.

They can call the police, but if you have proper documentation showing your security interest and right to repossess, law enforcement will typically not interfere with lawful repossession. The key is having your paperwork ready to show you're the secured party.

Ok that makes me feel better. I've been losing sleep over this whole situation. The borrower is 120 days behind and we really need to get the collateral back.

That's a great point. The equipment includes some larger machines that would require specialized moving equipment. We've tried negotiating but the debtor keeps promising payments that don't materialize.

In that case, you might want to give them a final deadline for voluntary surrender before proceeding with repossession. Document all communication attempts for your records.

We usually give a 10-day written notice before repossession even though it's not required. Gives the debtor one last chance to cure and shows good faith if there are later legal challenges.

I understand the frustration, but the UCC actually provides pretty clear guidance. Article 9 enforcement provisions like 9-604 are designed to balance creditor rights with debtor protections. The key is understanding your specific situation and following proper procedures.

I guess you're right, but every case seems to have unique complications. At least forums like this help share experiences and learn from others' situations.

Yes, I'm aware of the post-repossession requirements. We'll need to provide proper notice before any sale and ensure we get commercially reasonable prices for the equipment.

Exactly. And keep detailed records of the entire process from default notice through final disposition. Good documentation protects you if the debtor later claims improper enforcement.

That's the second mention of Certana.ai in this thread. Sounds like it might be worth checking out to make sure our documentation is solid before taking enforcement action.

Yeah, it's just a quick upload of your documents and it flags any potential issues. Much better to catch problems before they become costly mistakes during enforcement.

Will do. I'm planning to consult with our attorney early next week and then decide on the best approach. This discussion has been really helpful in thinking through the issues.

Good luck! Enforcement is never fun but sometimes it's necessary to protect your interests.