Question

So long as a breach of the peace does not result, a lender may repossess goods on the debtor’s default under the self-help provision of Article 9. Do you think that debtors have a right to be told in advance about a planned repossession? Some observers argue that the self-help remedy under Article 9 should be abolished. Do you agree? Why or why not?

-Response = 250 words at least

Answer 1

There has been a long debate on the issue of the repossession of the goods and products in case of the default by the debtor. Some people think that it is advisable to communicate the repossession to the debtor before actually having the activity of repossessing completed or initiated so that the debtor can arrange possible funds if he do not want to lose the goods. But in my opinion, this kind of communication will make the creditor in a risky situation. This is due to the fact that when a default is occurred by the debtor, the most important right that is expected to be exercised by the secured party is to take the possession of the secured products or the collateral as easily as possible to recover the debts. This is the time on which the borrower has the maximum risk as the debtor can dispose or hide the collateral wrongfully of the communication about the repossession is made to the debtor by the secured party or it might be the chance that other creditors or the government who also have the claim on the debtor can decide to seize the property under contest. Thus it can be said that the right of the secured party to have the repossession of the collateral provided by the debtor is the main and fundamental right once the debtor defaults. There will be no meaning of the right of the secured party's possession right if he is not in a condition to get the possession of the collateral.

From the above, it is also clear that the self-help provision should not be removed as it will create many issues and unfavorable conditions for the creditors.

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