At what point when you repo a vehicle do you actually put it on your books as a repossession? Is it after the 20 days has passed? If it is, then how do you categorize fees that come in prior to that - do they go under repossession fees or misc. loan expenses? I've been looking at the various sections in Business and Commercial Code Section 9, but I don't think the question is really answered there. We take a vehicle that is in default on the loan but the customer has the 20 days to buy it back. During that 20 day period, I'm being told we don't "put it on our books yet" as a repo - that they have to wait until after the 20 day period is up. I'm not finding anything that supports or refutes that practice. Also, sometimes expenses happen before that 20 day period is up, and they have been putting those in a GL for repo expenses, but since it's technically not on the books as a repo at that point, is that okay or should they go to misc. loan expenses until after it's on the books as a repo? Thanks for your input. I'm not experienced in repo, and I've been reading the code sections, but they don't seem to really answer the question in this case in my mind.

Thank you for your assistance.

I think most of the "guidance" you are looking for comes from accounting standards instead of state statutes.
1. Yes the borrower has 20 days, and therefore it is not the bank's asset until that time has passed. After that time you can transfer the "current market value" into the Asset of the bank - call it repo assets or other assets . . . same diff.
2. The expenses are directly related to retaking and/or protecting your collateral & can be directly added to the loan or paid out of a GL and keeping track of the total expenses.
Whether you add them to the loan or expense them - the end effect will normally be the same.
EXAMPLE Vehicle worth 8,000 Loan Balance 10,000 and expenses to repo $1,000
Net effect is you can only move $8,000 to Repo Assets and the other $3,000 will reduce this month's bank income because they were expenses. Whether they were added to the loan and then taken aginst the ALLL when you moved $8k to repo assets and wrote off the remaining balance(theory - requiring that much to be added to the reserve coming from income) or directly expensed from this months income.

Thank you!

Unless you are using "strict foreclosure", which I do not recommend because of it many limitations, the vehicle is never the bank's asset unless the bank purchases the vehicle at the foreclosure sale, which, in some situations, may not be wise.

The loan is a foreclosed loan once you repossess the collateral. When you recognize any loss in the value of the loan asset has more to do with general accounting principles. I would recognize the cost of collection and foreclosure as a period expense and not charge it to the loan loss reserve.

I would not charge any loss to the reserve until the debtor's time to cure has lapsed and the collateral has been sold. The amount of the loss is then an amount certain.

The amount of time you have to sell the vehicle is controlled by Article 9 (part 6 default).