Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

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When a secured creditor repossesses collateral, they may sometimes retain the collateral and cancel the debt. This is known as a "strict foreclosure." However, in some states and under certain circumstances, the creditor may be required to sell the collateral and apply the proceeds to the debt before canceling the remaining balance.

Generally, a Secured Creditor Who Has Repossessed Collateral May Retain