Walk It Through: The Car In The Driveway
A car bought on credit, a default, a tow truck before dawn, and the window to redeem.
The payments on a car bought on credit are behind, and the lender's letter says the loan is in default.
Two things a person in this spot might do. Picking one shows what the law says about it.
One car and one secured lender. Notice before a sale, whether a disposition was commercially reasonable, a deficiency or surplus afterward, and the consumer credit and motor vehicle statutes that may add requirements are not worked through here.
A practice walkthrough, not a prediction of how any real one will go. Legal information, not legal advice.
Words this turns on
Terms with a legal meaning that is narrower than the everyday one. Each links to the definition and the authority behind it.
- Breach of the peaceThe one condition on a secured party that takes collateral back without judicial process, such as a car bought on credit. It may do that only if it proceeds without breach of the peace.
- Redeeming collateralGetting collateral back by tendering fulfillment of all obligations it secures, plus the reasonable expenses and attorney's fees the Code describes. A debtor, a secondary obligor, or another secured party or lienholder may do it.
- RedemptionIn an eviction for nonpayment, restoring the tenancy at any time before possession is delivered by paying the rent in arrears with interest, costs and an attorney fee not to exceed $5.