Repossession is the process of a lender or his agent taking back items that were bought on credit or were pledged as collateral for a loan from a borrower who has fallen behind on loan payments. ^{Repo Company-1}

Detailed Answer:

Repossession is generally used to refer to a financial institution taking back an object that was either used as collateral or rented or leased in a transaction. This is usually done in accordance with a purchase contract or credit contract, in which the consumer agrees that the seller may repossess the object if the signers are past the grace period (generally for prime lenders the critical number is 30 days late making an installment payment but can vary based on how many payments have already been made, the length of the business relationship, reason why past due, etc.) Contracts that authorize repossession also usually specify additional fines that the consumer must pay to the seller, ostensibly to cover the seller’s costs of the repossession and of depreciated value of the object, as the seller is now in possession of a “used” object. Generally lending institutions never want to repossess because the items sold at a wholesale auction and were financed at retail price, hence, a loss is virtually guaranteed. However, the statisticians and accountants have determined that any loan which goes beyond 90 days past due will never again become “current” (up to date on payments) and the collateral continues to depreciate.

Repossession is a complicated and legally fraught matter, with legality being determined by widely varying local and state laws. In some jurisdictions, such as the United States, a consumer may avoid repossession of some of his property by declaring personal bankruptcy, throwing his financial arrangements on the mercy of a court, which will usually prevent the consumer’s house and, sometimes, his car from being repossessed. Both repossession and bankruptcy are significant negative events on a consumer’s credit report.

If a lender finds itself in the situation of needing to repossess property while the borrower attempts to avoid this, the dealer may contract the work of repossession out to a repossession agent (colloquially termed a Repo Man, as fictionally portrayed in the film of the same name). Agents appointed by the courts are called bailiffs.^{Repo Company-2}

Learn how to become a repo man

^{Repo Company-1: www.ots.treas.gov}

^{Repo Company-2:} Repossession. (2006, October 15). In Wikipedia, The Free Encyclopedia. Retrieved from http://en.wikipedia.org/w/index.php?title=Service_of_repossession&oldid=77311963

Definitions of Repossession found on the Web:

• To reclaim possession of collateral for failure to pay installments due.
  http://www.autoloansanywhere.com/auto_loan_terms.htm
  
• The legal process by which a borrower in default is deprived of their interest in a property. The process usually means the property is sold or auctioned off with the proceeds going to the lender.
  http://www.commercial-mortgage-loan.co.uk/about/glossary.htm
  
• A legal process by which the lender forces a sale of a property because the borrower has not met the terms of the mortgage.
  http://www.fairvalleyfinancial.com/mortgageglossary.html
  
• Occurs when a mortgage company obtains a court order to take possession of a property due to non payment of the mortgage.
  http://www.harrods.com/estates/Dictionary/
  
• Forced, or voluntary surrender of merchandise as a result of the customer’s failure to pay as promised. There are several types and descriptions of repossession actions.
  http://www.free-credit-report-info.com/credit_glossary.htm
  
• The process of a lender or his agent taking back items that were bought on credit or were pledged as collateral for a loan from a borrower who has fallen behind on loan payments.
  http://www.ots.treas.gov/glossary/gloss-r.html
  
• Property, such as a car, that is taken back by the creditor when the borrower does not make payments due on the property.
  http://www.nuestracdc.org/Mortgage%20Terminology.html
  
• When a house is repossessed, it is taken back by the lender holding the mortgage.
  http://www.boise-idahos-real-estate.com/real-estate-definitions-r-173.html
  
• Taking possession of property that was earlier sold on an installment contract because the buyer defaults on payment of the debt.
  http://www.bookkeeperlist.com/definitionsr.shtml
  
• If debtor is in default of the terms of the security instrument, the creditor can repossess (take) its collateral, sell the collateral and apply the proceeds from sale to the outstanding debt owed.
  http://www.vandenbos-chapman.com/index.php
  
• When a creditor seizes property, such as a car or a house, because payment has not been made.
  http://www.nacdc.org/financial/glossary/
  
• The Company shall be entitled to immediate re-delivery of the goods any time after the due date for payment or before such due date in the case of occurrence of any of the following events namely: (a) Appointment of a receiver or liquidator over assets of the Customer, or (b) The bankruptcy of the Customer (if an individual or partnership), or (c) The Customer being unable to meet its debts in the normal course of business and for the purpose of such recovery and/or resale of the goods the …
  http://www.captec.ws/terms_and_conditions.php3
  
• The action of regaining possession (especially the seizure of collateral securing a loan that is in default).
  http://wordnet.princeton.edu/perl/webwn