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When your airplane is the collateral for a secured loan, the creditor may be able to repossess the airplane as long as they can do so without breaching the peace. If this is the problem you are facing, it's important to hire an airplane repo attorney so that you can avoid losing your aircraft.
Why You Specifically Need an Airplane Repo Attorney
Airplane ownership can be much more complicated than the ownership of other types of property such as the ownership of a car. If your airplane could potentially be repossessed, you will need help from an attorney who is not only knowledgeable about airplane financing but also the airline industry.
Options Available to the Lender
Once you have defaulted on your loan, the lender is allowed to repossess your airplane or is allowed to render it unusable. Once the airplane has been sold, you will be required to pay off the remainder of the loan minus the amount that the airplane was sold for.
Also, if your airplane was leased to you and the lease expired, the lessee is allowed to take the airplane and sell it or lease it to another party. If the lender is not able to repossess the airplane safely, they may be forced to obtain a court order.
You may then be allowed to take steps to seek an extension so that you can remain in possession of the airplane for longer with the help of an airplane repo attorney. For example, if the lender agrees to accept a partial payment, you may be able to delay the repossession until you are able to cure the default by making the payment owed.
Acceleration of the Maturity of the Loan
The lender also has the option to accelerate the maturity of the loan. If this is the case, you may be required to pay the loan back in full with a single payment to be able to remain in possession of the airplane.
However, the lender is only able to do this if the terms of the loan include an "acceleration clause." If this does not exist, your airplane repo attorney might use this fact as an excuse to prevent the lender from accelerating the repossession.
Giving Back the Airplane
You do not necessarily have to keep the airplane and might decide that it is less expensive to simply surrender the airplane to the lender. You should consult with an attorney before doing so but you may be able to reduce the amount you owe afterward.