425.201
425.201
Scope. This subchapter applies to the enforcement by a creditor of security interests in collateral.
425.201 History
History: 1971 c. 239.
425.202
425.202
Definition: "collateral". For purposes of this chapter, "collateral" means goods subject to a security interest in favor of a merchant which secures a customer's obligations under a consumer credit transaction.
425.202 History
History: 1971 c. 239;
1975 c. 407.
425.203
425.203
Enforcement of merchant's rights in collateral and leased goods. 425.203(1)(1) At any time after default (
s. 425.103) and the expiration of the period for cure of default (
s. 425.105), if applicable, a merchant may commence an action to recover collateral or goods subject to a consumer lease pursuant to
s. 425.205, or reduce the claim to a judgment by any available judicial procedure.
425.203(2)
(2) In any action for a judgment under
sub. (1) other than an action pursuant to
s. 425.205, the judgment may provide for the right to possession of the collateral or leased goods by the merchant and for a deficiency, if the merchant would not be precluded from a deficiency judgment under
s. 425.209 had the merchant initially proceeded against the collateral and if the judgment includes a finding that the merchant has the right to possession of any collateral securing the consumer credit transaction or goods subject to a consumer lease. Upon determining such judgment under this subsection the merchant shall have the right to:
425.203(2)(a)
(a) Have execution issue to require the sheriff in the county where the collateral or leased goods may be to take the same from the defendant and deliver it to the plaintiff; or
425.203(2)(b)
(b) Immediately exercise the right to nonjudicial recovery of the collateral or leased goods, subject to
s. 425.206.
425.203(3)
(3) Following recovery of collateral pursuant to a judgment under
sub. (2), the merchant may either retain the collateral in full satisfaction of the customer's obligation pursuant to
ss. 409.620 to
409.624, in which event the merchant shall satisfy the judgment obtained pursuant to
sub. (2); or shall dispose of the collateral pursuant to
subch. VI of ch. 409, in which event:
425.203(3)(a)
(a) The merchant shall apply to the court which entered the judgment pursuant to
sub. (2) to confirm the sale or other disposition of the collateral upon 8 days' notice to all parties named in such action, either personally or by certified or registered mail directed to the last-known address of the parties. Such notice shall state, in addition to any other matter required by law, the time and place of the hearing, the amount of the judgment, the proceeds received upon disposition of the collateral, the fair market value of the collateral claimed by the merchant if such standard is applicable under
s. 425.210, the reasonable expenses incurred in disposition of collateral, the net amount proposed to be credited against the judgment, and any deficiency remaining. In addition, the notice directed to the customer shall conspicuously advise the customer of the right to appear at such hearing and to contest any matter set forth in the notice.
425.203(3)(b)
(b) At such a hearing on confirmation, the court shall determine on the basis of the evidence presented by the parties, by affidavit or otherwise, the commercial reasonableness of the merchant's disposition of the collateral, the reasonable expenses incurred by the merchant in disposition of the collateral, the compliance with
s. 425.210 if applicable, the resulting amount to be credited against the judgment and the remaining deficiency. Following such hearing and determinations, the court shall enter an appropriate order to satisfy the judgment and provide such other relief as may be appropriate. Where the underlying transaction is a consumer credit sale of goods or services or a consumer loan in which the lender is subject to defenses arising from
s. 422.408, this hearing shall be considered a proceeding for a deficiency judgment pursuant to
s. 425.209 (1).
425.203(4)
(4) Following recovery of goods subject to a consumer lease pursuant to a judgment under
sub. (2), no deficiency shall be allowable unless the merchant disposes of the leased goods and applies the proceeds to the customer's obligation, in which event:
425.203(4)(a)
(a) The merchant shall apply to the court which entered the judgment pursuant to
sub. (2) to confirm the sale or other disposition of the leased goods upon 8 days' notice to all parties named in the action, either personally or by certified or registered mail directed to the last-known address of the parties. Such notice shall state, in addition to any other matter required by law, the time and place of the hearing, the amount of the judgment, the proceeds received upon disposition of the leased goods, the reasonable expenses incurred in disposition of the leased goods, the net amount proposed to be credited against the judgment, and any deficiency remaining. In addition, the notice directed to the customer shall conspicuously advise the customer of the right to appear at such hearing and to contest any matter set forth in the notice.
425.203(4)(b)
(b) At such a hearing on confirmation, the court shall determine on the basis of evidence presented by the parties, by affidavit or otherwise, the commercial reasonableness of the merchant's disposition of the leased goods, the reasonable expenses incurred by the merchant in disposition of the leased goods, and the resulting amount to be credited against the judgment entered pursuant to
sub. (2). Following such hearing and determinations, the court shall enter an appropriate order to satisfy the judgment and provide such other relief as may be appropriate.
425.204
425.204
Voluntary surrender of collateral. 425.204(1)
(1) Notwithstanding a waiver by the creditor of the security interest in collateral under
s. 425.203 (2) or any other law, the customer shall have the right at any time to voluntarily surrender all of the customer's rights and interests in the collateral to the merchant.
425.204(2)
(2) The rights and obligations of the merchant and customer with respect to collateral voluntarily surrendered as defined in this section shall be governed by
subch. VI of ch. 409, and are not subject to this subchapter.
425.204(3)
(3) The surrender of collateral by a customer is not a voluntary surrender if it is made pursuant to a request or demand by the merchant for the surrender of the collateral, or if it is made pursuant to a threat, statement or notice by the merchant that the merchant intends to take possession of the collateral.
425.204 Cross-reference
Cross Reference: See also s.
DFI-Bkg 80.67, Wis. adm. code.
425.204 Annotation
Under the facts of the case, the customer did not "voluntarily surrender" collateral under sub. (3). Wachal v. Ketterhagen Motor Sales, Inc.
81 Wis. 2d 605,
260 N.W.2d 770 (1978).
425.205
425.205
Action to recover collateral. 425.205(1)
(1) Except as provided in
s. 425.206, a creditor seeking to obtain possession of collateral or goods subject to a consumer lease shall commence an action for replevin of the collateral or leased goods. Those actions shall be conducted in accordance with
ch. 799, notwithstanding
s. 799.01 (1) (c) and the value of the collateral or leased goods sought to be recovered, except that:
425.205(1)(a)
(a) Notwithstanding
ss. 799.05 (2) and
799.06 (2), process shall be issued by the clerk of court, and such action shall be commenced upon the request of an officer or employee of a merchant on the merchant's behalf;
425.205(1)(b)
(b) The summons shall be in the form prescribed in
sub. (2), and a complaint in the form described in
sub. (3) shall be served with the summons;
425.205(1)(c)
(c) When service is made pursuant to
s. 799.12 (3) certified mail with return receipt requested shall be employed;
425.205(1)(d)
(d) On the return date of the summons or any adjournment date thereof the customer shall have the right to a hearing on the issue of default or other matter which questions the validity of the merchant's claim to the collateral or leased goods, and the customer may answer, move to dismiss under
s. 802.06 (2) or otherwise plead to the complaint orally, but if the customer fails to appear on the return day, judgment may be entered by the clerk or judge in accordance with the demands of the verified complaint, or upon an affidavit of the facts, or sworn testimony or other evidence to the clerk or judge; and
425.205(1)(e)
(e) Judgment in such action shall determine only the right to possession of the collateral or leased goods, but such judgment shall not bar any subsequent action for damages or deficiency to the extent permitted by this subchapter.
425.205(2)
(2) The summons in such actions shall be in the following form:
State of Wisconsin
Circuit Court
.... County
A. B. Plaintiff
v.
C. D. Defendant
SUMMONS (Small Claim)
THE STATE OF WISCONSIN
To said Defendant:
The Plaintiff named above has commenced an action to recover possession of the following property:
[Description of Collateral or Leased Goods]
This claim arises under a consumer credit transaction under which you are alleged to be in default, as described in the attached complaint.
IF YOU ARE NOT IN DEFAULT OR HAVE AN OBJECTION TO THE PLAINTIFF'S TAKING THE PROPERTY LISTED ABOVE, YOU MAY ARRANGE FOR A HEARING ON THESE ISSUES BY APPEARING IN THE CIRCUIT COURT OF .... COUNTY, IN THE COURTHOUSE LOCATED IN ...., (municipality), BEFORE JUDGE .... OR ANY OTHER JUDGE TO WHOM THE ACTION MAY BE ASSIGNED, ON .... (date), AT .... (time). IF YOU DO NOT APPEAR AT THAT TIME, JUDGMENT WILL BE RENDERED AGAINST YOU FOR DELIVERY OF THE PROPERTY TO THE PLAINTIFF.
DATED ...., .... (year)
E.F.
Clerk of Circuit Court
[or]
Plaintiff's Attorney
Plaintiff's P. O. Address
....
....
Plaintiff's Attorney (if any)
....
....
Defendant's P. O. Address
....
....
425.205(3)
(3) The complaint in such action shall conform with the requirements of
s. 425.109.
425.205(4)
(4) Upon the written request of the customer, the merchant shall produce an accurate copy of writings evidencing any transactions pursuant to an open-end credit plan upon which the merchant's claim is made, and judgment shall not be entered for the merchant until the merchant does so.
425.205(5)
(5) Upon entry of judgment for the plaintiff, the plaintiff shall have the right to:
425.205(5)(a)
(a) Have execution issue to require the sheriff of the county where the collateral or leased goods may be to take the same from the defendant and deliver it to the plaintiff; or
425.205(5)(b)
(b) Immediately exercise the right to nonjudicial recovery of the collateral or leased goods, subject to
s. 425.206.
425.205(6)
(6) Action pursuant to this section may be commenced at any time after the customer is in default, but the return day of process may not be set prior to the expiration of the period for cure of the default by the customer (
s. 425.105), if applicable.
425.206
425.206
Nonjudicial enforcement limited. 425.206(1)
(1) Notwithstanding any other provision of law, no merchant may take possession of collateral or goods subject to a consumer lease in this state by means other than legal process in accordance with this subchapter except when:
425.206(1)(a)
(a) The customer has surrendered the collateral or leased goods;
425.206(1)(b)
(b) Judgment for the merchant has been entered in a proceeding for recovery of collateral or leased goods under
s. 425.205, or for possession of the collateral or leased goods under
s. 425.203 (2); or
425.206(2)
(2) In taking possession of collateral or leased goods, no merchant may do any of the following:
425.206(2)(b)
(b) Enter a dwelling used by the customer as a residence except at the voluntary request of a customer.
425.206 Annotation
Under the facts of the case, the customer did not "voluntarily surrender"collateral sub. (1) (a). Wachal v. Ketterhagen Motor Sales, Inc.
81 Wis. 2d 605,
260 N.W.2d 770 (1978).
425.206 Annotation
Notwithstanding s. 421.201 (5), this section governed repossessions outside the state when the contract provided for enforcement under the "internal law" of Wisconsin. First Wisconsin National Bank of Madison v. Nicolaou,
85 Wis. 2d 393,
270 N.W.2d 582 (Ct. App. 1978).
425.206 Annotation
A "breach of the peace" under sub. (2) has the same meaning as in s. 409.503. Repossession in disregard of the debtor's oral protest is a breach of the peace. Punitive damages may be appropriate as the result of the breach of the peace. Hollibush v. Ford Motor Company,
179 Wis. 2d 799,
508 N.W.2d 449 (Ct. App. 1993).
425.206 Annotation
Repossession under an invalid judgment violates this section. Kett v. Community Credit Plan, Inc.
228 Wis. 2d 1,
596 N.W.2d 786 (1999).
425.206 Annotation
The abolition of self-help repossession; the poor pay even more. White, 1973 WLR 503.
425.206 Annotation
The impact of denying self-help repossession of automobiles: a case study of the Wisconsin consumer act. Whitford, Laufer, 1975 WLR 607.
425.207
425.207
Restraining order to protect collateral or leased goods; abandoned property. 425.207(1)
(1) If the court finds that the merchant probably will recover possession of the collateral or goods subject to a consumer lease, and the customer is acting, or is about to act, with respect to the collateral or leased goods in a manner which substantially impairs the merchant's prospect for realization of the merchant's security interest or the merchant's interest in the leased goods, the court may issue an order pursuant to
s. 813.02 restraining the customer from so acting with respect to the collateral or leased goods, and need not require a bond by the merchant, notwithstanding
s. 813.06.
425.207(2)
(2) A merchant who reasonably believes that a customer has abandoned collateral or goods subject to a consumer lease may take possession of such collateral or leased goods and preserve it. However, the customer may recover such collateral or leased goods upon request unless at the time of request the customer has surrendered the collateral or leased goods, or judgment for the merchant has been entered in a proceeding for recovery of collateral or leased goods under
s. 425.205 or in a judgment described in
s. 425.203 (2). A merchant taking possession of collateral or leased goods pursuant to this section shall promptly send notification to the customer's last-known address of such action and of the customer's right to recover such collateral or leased goods under this section. If the collateral or leased goods are recovered by the customer pursuant to this section, it shall be returned to the customer at the location where the merchant took possession of such collateral or leased goods pursuant to this section or, at the option of the merchant, at such other location designated by the customer; and any expense incurred by the merchant in taking possession of, holding and returning the collateral or leased goods to the customer shall be borne by the merchant. If after taking possession of collateral or leased goods pursuant to this subsection, the merchant perfects the right to possession through a surrender by the customer or a judgment under
s. 425.203 (2) or
425.205, the customer is liable for the expenses set forth in
s. 409.615 (1). In determining such expenses, leased goods shall be considered collateral under
s. 409.615 (1). However, a customer is not liable for expenses of holding the collateral or leased goods from the time the merchant takes possession until the merchant perfects the right to possession in the manner provided in this subsection.
425.208
425.208
Customer's right to redeem. 425.208(1)
(1) For a period of 15 days following exercise by the creditor of nonjudicial enforcement rights (
s. 425.206) or issuance of process (
s. 425.205) with regard to the collateral, the customer shall be entitled to redeem the goods by tendering:
425.208(1)(a)
(a) The total of all unpaid amounts, including any unpaid delinquency or deferral charges due at the time of tender, without acceleration; plus
425.208(1)(b)
(b) Performance necessary to cure any default other than nonpayment of amounts due; plus
