Under the UCC an unpaid lien holder may repossess without court order - is this accurate?

This is exactly right. The 'breach of peace' standard is key. I've seen cases where repo agents had to walk away because the debtor came out and said no.

What about if the collateral is inside a locked garage? Can they break in or not?

No, breaking into a locked structure would typically constitute breach of peace. They'd need to get a court order or wait for the collateral to be accessible.

Thanks! So they have multiple remedies available, not just repossession. That makes more sense with what I was reading.

Wait, can they really do both? I thought it was either/or?

They can pursue both remedies but can't recover more than they're owed. So if they sue and get a judgment, then repo and sell, the total recovery can't exceed the debt plus allowed expenses.

Name mismatches are the worst! How does that tool work exactly?

You just upload PDFs of your documents and it cross-checks debtor names, filing numbers, collateral descriptions - basically verifies everything aligns. Really simple but caught issues we missed manually.

Ugh yes, debtor names have to match exactly. One wrong middle initial can void your entire security interest.

Good point about the notice requirements. How much notice is considered 'reasonable'?

Usually at least 10 days for most sales, but it depends on the type of collateral and whether it's a public or private sale. Commercial transactions might need longer notice.

And don't they have to send notice to other secured parties too? Not just the debtor?

Yes, if they know about other security interests in the same collateral, they typically need to notify those parties as well.

I understand the frustration, but there are protections built in. If they repo wrongfully, you can sue for damages. The system assumes the security agreement is valid unless proven otherwise.

Easy to say when it's not your car getting towed at 3am! The burden should be on THEM to prove they have the right to take it.

Actually had a similar situation and the documentation verification through Certana really helped prove the lender's filing had errors. Sometimes the issue is sloppy paperwork on their end.

This is super helpful! I'm going to make flashcards with these elements.

What constitutes 'default' though? Just missing payments or other things too?

Default is defined in the security agreement. Usually payment default, but can include other breaches like failure to maintain insurance or violating use restrictions.

Ugh, the terminology is so confusing. Is there a difference I should know?

For practical purposes in Article 9, they're usually the same. But technically a lien can arise by operation of law while a security interest is created by agreement. Your exam will probably use 'secured party.

Really? I thought if they had a valid security interest they could take it anywhere.

Nope, entering someone's home for repo would almost always be breach of peace. Plus many states have specific laws protecting the home.

Yeah but good luck getting a fair price at a repo sale. They usually sell for way below market value.

That's why the 'commercially reasonable' standard exists. If the sale isn't reasonable, the debtor can challenge it.

This is where having your documentation perfect becomes crucial. Can't enforce your rights if your UCC filing has errors. That Certana tool I mentioned earlier would have caught our name mismatch before we even tried to repo.

When would they choose that over selling it?

Usually when the collateral's value roughly equals the debt, or when a sale would be difficult or expensive. Like specialized equipment with no ready market.

But if it's consumer goods worth more than 60% of the debt, they have to sell it, right? Can't just keep it.

Exactly right. UCC 9-620(e) requires sale in that situation to protect consumers from losing valuable collateral.

This is really helpful context! I didn't even know about strict foreclosure as an option. So they have three main remedies: sue for the debt, repossess and sell, or just keep the collateral (with restrictions). Thanks for explaining the consumer goods protection too - that 60% rule is something I need to remember for the exam.