When a debtor defaults, a secured creditor can take possession of the collateral without a court order and either retain or resell the collateral.

Question

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Under the Uniform Commercial Code (UCC), a secured creditor has the right to take possession of the collateral without a court order if it can be done without breaching the peace. The creditor can then choose to either retain the collateral in satisfaction of the debt or resell it to recover the amount owed.

When a Debtor Defaults, a Secured Creditor Can Take Possession