What is Aircraft Repossession?
Aircraft repossession is similar to other forms of repossession by a lender. It is much more challenging, however. For one thing, an aircraft is more cumbersome to repossess than a car. Unlike a house, many kinds of aircraft can be relocated to anywhere in the world. All of these factors can make the job of aircraft repossession difficult and risky.
Missed payments or other breaches of a written agreement usually precede an aircraft being repossessed. Any notice requirements must also be met. Notice requirements can vary, depending on any applicable repossession laws.
Generally, the lender must give notice that payments are late and the aircraft is in peril of being repossessed. This can also mean giving the debtor the chance to get the payments current. It is usually in the lender's best interest to try to work out a revised payment arrangement than to repossess the aircraft.
Loan documents are usually used to prove that the lender has the right to conduct the aircraft repossession. The first step in aircraft repossession involves a thorough review of all loan documents. After all of the paperwork is in order, the aircraft can be legally seized.
An aircraft repossession will often require the involvement of other parties. For example, cooperation might be needed from employees at an airport or a hangar where the aircraft is housed. In some cases, the employees might not cooperate if a court order is not shown. If that happens, legal action will be required to complete the aircraft repossession.
Additional legal action can slow down the process. For example, hearings might be required before the aircraft is repossessed. The entire process could take weeks or months. Additionally, a separate court order might be required to seize the aircraft’s logs or records.
A lender will usually employ aircraft repossession as a last resort. One reason is that a recovered aircraft will often represent a loss because more is owed on it than it is worth. The aircraft will also need to be sold to recover any losses.
Selling a repossessed aircraft usually requires a public auction. Additional fees might be incurred to hire an auction firm. In some cases, a law firm can conduct the auction.
Those who conduct the actual aircraft repossession must have specialized skills. First, they must know how to operate the aircraft before taking it. This can include overcoming anything that might have been done to the disable the aircraft if the debtor knows that it is scheduled to be repossessed. An aircraft repossession is considered a success if a recovery is made without incident and the lender is able to sell the aircraft and partially or fully recoup any the losses.
Aren't the repossession documents enough to avoid actually stealing the plane?
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