In most cases, repossession happens only after the concerned creditor has warned the debtor repeatedly and finally comes to the conclusion that the debtor in question is avoiding repayment of the loan or is in no financial position to pay up anytime soon. In such a case, when the loan lender is completely certain of not getting his money, he resorts to the extreme step of repossession.
Since it is usually a very unpleasant affair, there are various laws concerning repossession so that no party on either side of the agreement concerned receives an unfair deal.
Repossession is generally of two major types. It might be voluntary or involuntary. Involuntary repossession happens when the person whose property is being repossessed does not give the creditor his express consent to the repossession. Such cases are often very messy and there are some very strict procedures in state laws that, if not followed properly, can lead to serious repercussions for the parties involved.
However, voluntary repossession is another thing. If the debtor comes to realize that it would better to let whatever is agreed to as collateral to be repossessed since he is not in a position to repay the loan incurred, he will often himself agree to the repossession. Such cases save a lot of hassle and can even save a lot of money for the person who has availed the loan too. This is because, if the debtor is found guilty is a case of involuntary repossession, he will most often have to bear the charges of transportation, storing, maintenance etc. that the creditor has incurred during repossession.
Repossession is a very grave matter and a threat should at no time be taken lightly. You would be better of if you could keep yourself informed about the various laws governing repossession to guard yourself against unlawful repossession.