What happens if a secured party repossesses collateral?

When a secured party repossesses collateral, they must ensure that the repossession occurs without a breach of the peace. This requirement emphasizes the need for the repossession process to be conducted lawfully and without causing any disturbance or conflict. Breaching the peace can result in legal repercussions, as it may involve unlawful force or confrontation.

In the context of secured transactions, the Uniform Commercial Code (UCC) allows a secured party to take possession of the collateral after a default, but only in a manner that is peaceful. This could mean, for instance, taking possession of a vehicle parked on a public street without entering a private property unlawfully.

The other options relate to nuances of the repossession process but do not accurately reflect the essential legal constraints. For instance, while notification to the debtor and other parties is required before selling the repossessed collateral, it may not be necessary to wait for a court order to sell, as secured parties generally have the right to dispose of the collateral after proper notice is given and any applicable waiting periods are observed. However, the initial repossession must be conducted peacefully, aligning with the correct answer.