Repossession of property is the process by which a creditor recovers possession of the property when the debtor defaults on the debt by failing to make the required installment payments on time. Repossession is often used by a creditor who has extended credit to a debtor for the purchase of personal property, such as a motor vehicle, boat, machinery, equipment, tools, artwork, jewelry, or rent-to-own furniture or electronics.

The creditor’s right to repossess the property usually comes from the credit financing agreement the debtor signs when purchasing or renting-to-own the property.

Laws governing creditor and debtor rights and obligations—including the right to repossess property—vary from state to state and are usually located in a state’s statutes—often in the state’s adopted or enacted version of Article 9 of the Uniform Commercial Code, governing secured transactions.

In Kentucky, repossession of property is governed by the state's version of Article 9 of the Uniform Commercial Code (UCC), which regulates secured transactions. When a debtor defaults on a secured loan by failing to make timely payments, the creditor has the right to repossess the collateral, such as vehicles, boats, or other personal property, without initiating judicial proceedings, provided the repossession is conducted without breaching the peace. The credit agreement signed by the debtor typically outlines the terms under which repossession can occur. After repossession, the creditor may sell the property to satisfy the debt, and the debtor is usually responsible for any deficiency between the sale price and the remaining loan balance. Kentucky law requires creditors to provide notice to the debtor before selling the repossessed property and to conduct the sale in a commercially reasonable manner. Debtors have the right to redeem the property by paying the full debt plus any reasonable expenses incurred by the creditor before the sale of the property.