What rights does a secured creditor have upon a debtor's default?

A secured creditor has specific rights when a debtor defaults on a loan secured by collateral. One of these primary rights includes the ability to repossess the collateral. This means that if the debtor fails to meet the obligations of the loan—such as making payments—the secured creditor can take possession of the property that was pledged as security for the loan, in order to satisfy the outstanding debt. This process is usually governed by both the contract between the parties and by state laws, which outline the procedures the creditor must follow to reclaim the collateral.

Other options, such as modifying the terms of the loan, forgiving the debt, or increasing the interest rate, do not directly relate to the immediate rights a secured creditor has upon a debtor's default. Modifying the terms may occur, but it would typically require agreement from both parties, rather than being a unilateral right of the creditor. Forgiving the debt is not a right that a creditor has; it is a choice that may be made, but it is not an automatic right in the event of default. Additionally, the ability to increase the interest rate would generally depend on the original loan agreement's terms and applicable law, rather than being a right triggered by default.

Focusing on the default situation, repossess