Businesses that rent equipment to other companies or that finance equipment purchases typically use the machinery or devices they provide to organizations as collateral for attached financial obligations.
Most businesses that need machinery and specialized equipment to operate are fastidious about staying up to date on rental payments or loan obligations. However, sometimes companies fall behind on their bills enough to trigger repossession clauses integrated into rental contracts or loan paperwork.
If the business does not voluntarily allow the repossession of the equipment used as security for a financial obligation, going to court can facilitate repossession.
Commercial equipment repossessions are common
The laws regulating equipment and machinery repossession often allow creditors owed a past-due amount secured by equipment to repossess that property without a court order. However, to do so, they must be able to access the business that currently possesses the property and remove it without any disruption of the peace.
When the business that uses the equipment but has failed to pay for it tries to fight the repossession or denies the creditor/lender access, a court order may be the only way to move forward with the repossession process. Rental agreements and loan paperwork naming the equipment as collateral for the loan to purchase it generally extend clear protections to rental and financial organizations.
Regardless of the reason for the other company’s default on financial obligations, the courts are likely to rule in favor of the creditor. Repossession is a viable solution as long as creditors follow all necessary procedures and have documentation to prove that a violation of a payment plan or rental agreement occurred.
Reviewing payment records, rental agreements or financing contracts with a skilled legal team can help frustrated creditors explore their collection options. A Florida commercial collections attorney can streamline the process of securing a court order for equipment repossession and help creditors explore other collection options as well.