One way to collect a secured debt is to file a replevin action. This allows a secured creditor to take possession of collateral used to secure a debt instrument. The goal of a replevin action is to obtain an order of seizure to recover possession of property. The claim establishes the right to immediate control of the collateral. At Klapper and Fass, our commercial debt collections attorneys can advise clients in New York and nationwide on their options for recovery.Asserting Your Rights through a Replevin Action
When a borrower defaults on a loan, the secured party or creditor can reduce the claim to a claim to judgment or otherwise enforce the claim or security interest by any available judicial procedure. When the collateral is the right to payment, the secured party can collect from debtors and others obligated to make payment and apply the proceeds to the secured debt. The secured party can also use self-help means if it can do so without breaching the peace. The secured party can also take possession of the collateral by judicial process, such as a replevin action. See UCC 9-609.
Replevin is a type of action that can be used by anyone with a genuine claim to property, but it is commonly used by secured creditors trying to repossess collateral that a debtor refuses to surrender after defaulting on a loan. It is sometimes used to return goods to a seller when a buyer does not pay the seller and may also be used when there is a dispute about who is the rightful owner of property. Under CPLR Article 71, a secured creditor may be entitled to possession of the collateral before judgment by means of an order of seizure. The application for an order to seizure is a pre-judgment remedy brought on by order to show cause and requires the secured party or owner of the property to prove by affidavit that the applicant has a possessory right to the property and has a likelihood of ultimate success on the underlying claim. The Order of Seizure also requires the applicant to post an undertaking or bond.
A prima facie case for replevin requires a plaintiff to show it is entitled to immediate possession of personal property (chattel) and has made a demand to the person or entity possessing the property, but the demand has been refused. Like conversion, a replevin cause of action has a three-year statute of limitations under CPLR 214(3). This time period starts to run as soon as both a demand and a refusal have been made.
The demand letter need not use the word "demand," but it has to convey the demander's clear assertion that the demander is the owner of the property and that the person upon whom the demand is made does not have any rights other than those permitted by the demander. Likewise, the refusal does not need to specifically use "refuse," but it must clearly show the intent to interfere with the demander's possession or use of the property. For example, someone who responds to a demand and conditions return of the property on the resolution of another dispute is considered to be refusing. The defendant will need to show it is rightfully entitled to possession or is a bona fide purchaser of the property.Enlist a New York Lawyer When Considering Litigation
Whether you are bringing a replevin action or seeking to use another mechanism for recovering collateral on a secured claim, the litigation attorneys at Klapper & Fass can help protect your interests. Based in New York, we represent clients throughout the U.S. We maintain offices in White Plains and Manhattan, serving all five boroughs in New York City. We also provide legal representation in Orange, Dutchess, Suffolk, Rockland, Westchester, and Nassau Counties, as well as in states such as Texas and Florida. Contact our office at 914.287.6466 or via our online form.