Repossession

Repossession refers to the legal process by which a lender or financial institution reclaims property used as collateral when a borrower fails to meet their payment obligations. This procedure is a specific type of asset recovery, distinct from broader debt collection methods such as bankruptcy. In real estate, repossession usually happens through foreclosure, where a lender takes control of a property after the borrower defaults on mortgage payments. Historically, repossession has been a method for creditors to recover pledged assets, evolving from ancient customs to formal legal practices designed to protect both lenders and borrowers.