• Every state has its own set of repossession laws.kn_foton image by Paco Ayala from Fotolia.com
  
  Each state has its own laws pertaining to different facets of consumer protection, ownership, lending and business. For example, repossession laws in Texas are unique in comparison to repossession laws in other states. For this reason, it is important to brush up on local laws when borrowing money to purchase a car as a resident of the state of Texas.
  
  

Title and License Registration

• The division responsible for title registration and license registration is the Division of Motor Vehicles with the Department of Transportation in Texas. The DMV handles inquiries about title and license registration information and corresponding laws.
  
  Texas DOT Division of Motor Vehicles
  4000 Jackson Ave.
  Austin, Texas 78738
  (512) 465-7611
  
  

Right to Possession

• According to the Business and Commerce Code in Texas, the secured party has the right to claim possession of collateral upon the default of a loan unless other agreements were made in a legal contract. In the taking of possession, the secured party has the right to proceed in taking control over the collateral without any judicial process only as long as it can be done without a break of peace. If this is not possible, then legal action may be required to proceed.
  
  

Right to Redeem

• The owner of the property is legally allowed to redeem his collateral by repaying any debts that the collateral was put up for, according to the Business and Commerce Code. Otherwise, collateral can be retained by the lender until the obligation has been properly satisfied. Arrangements can be made between lender and borrower to return the collateral in exchange for an amended payment agreement, but it is up to the lender whether or not the agreement is accepted and the collateral is returned to its owner.
  
  

Contract Law

• The borrower responsible for putting up the collateral is required by law to follow the provisions set forth in the contract signed when the collateral was offered. Repossession laws in Texas grant lenders the ability to carry out provisions in legal contracts signed between lender and borrower. Collateral is offered on the premise that a specific repayment plan is followed, and when a loan is defaulted on, repossession law allows the lender to take control over the collateral until provisions in the contract are fulfilled.