What can be legally repossessed?

Repossession occurs if a seller of certain property takes back what has been sold because the purchaser has defaulted on his or her payments. Repossession is a step that a seller takes as a means of partially or fully recovering what has been sold, when the buyer does not pay.

Majority of things that have been sold may be repossessed. A common example of this is a home which the seller may repossess, if the purchaser cannot or will not pay. Once the purchaser fails to pay mortgage for the purchased home, a financial institution like a bank may repossess the property, or take foreclosure steps to recover it. Another example of repossession is with vehicles – if a buyer misses out on payments, then the car may be repossessed. One more common example of repossession is collateral repossession. Certain borrowers turn over to a lending institution a security interest in a specific property; but, if the borrower fails to make payments, that lending institution may repossess the said property. This usually happens to businesses that pledges a security interest in some inventory or equipment that business is purchasing by the use of a line of credit or a loan.

The seller has, of course, no rights to repossess if you have fully paid for something that you have purchased. It is only when you buy something through some sort of financing, credit or installment plan can repossession be done by a seller. A seller's right to repossess has to be stipulated in a purchase contract which states that the seller may repossess in the event of missed payments.