The Legalities Of An Airplane Repo

As with any asset purchased using credit, a lender can repossess an airplane. However, there is always a due process to protect the borrower's rights. If you're dealing with an airplane repossession, you should be aware of these six legalities.

What Constitutes Default

The first question an airplane repo attorney will want to address is whether the loan in question is in default. What counts as a default depends on the loan agreement and state laws. For example, most agreements have grace periods to encourage borrowers to get back on track with payments. State laws may also impose further limits on when a borrower defaults.

Some lenders jump the gun on repossession. If a borrower wasn't in default, they may have grounds to demand the return of the craft.

Due Process

Most states also have laws that require some degree of due process. Minimally, the lender should notify the borrower that they are in default. Some jurisdictions permit self-help remedies, meaning that the lender can physically repossess the aircraft without going to court. They still have to make a good-faith effort to confirm that a default has occurred. Ideally, they should offer the borrower a chance to cure the default. Some states require a court order before a lender can repossess an airplane.

Borrowers should document everything related to due process. If the lender hasn't formally notified the borrower of a default, an airplane repo attorney may present that as evidence in court.


Repossession rules vary among jurisdictions. The lease agreement might have a venue clause that determines where adjudication will take place. However, that doesn't necessarily allow a lender to ignore the rules wherever the plane currently is. If the plane is in a foreign country, that may further complicate jurisdiction questions.

Documenting Payments

Many repossession actions happen wrongly. A lender might have failed to note a payment. Worse, an automated system may have flagged the craft for repossession. In extreme cases, this could involve a failure to note that the obligation was paid in full.

Lessees need to document all payments. Make copies of all receipts, especially anything that might prove you made a final payment.

Legal Paperwork

Finally, you want to track all of the legal paperwork. Whatever the other side sends you, make copies and provide them to an airplane repo attorney. If you have copies of the registration and the lien, make additional copies for your counsel's benefit.

 For more info, contact a local airplane repo attorney