Chapter 16: Special Consumer Credit Management

Question 1

Special Credit Management

Answer 1

W/ a credit agreement, both parties are bound to agreement

special credit management:
* Payment arrears
* notice of default
* recovery of outstanding debt

Question 2

Payment Arrears

Answer 2

overdue money
* monthly payment missed
* limit is exceeded

written reminders are sent first, after a set period the credit provider sends a notice of default

Question 3

Notice of default

Answer 3

Formal letter from credit provider that they are in arrears, given a fixed deadline for default

Question 4

Recovery of outstanding debt

Answer 4

If borower has stopped making payments:
* Can use enforcement of securities if applicable
* Impose an attachment of consumer possessions
* Apply for bankruptcy on behalf of consumer

Question 5

Enforcement of securities

Answer 5

With purchase financing, a retention of title is established on the financed goods. Credit provider can seize the goods.

Similar with cash credit, using a right of pledge

Question 6

Applying for Bankruptcy

Answer 6

Court order = consumer lose right of disposal over all of his possessions

Court appoints a receiver for admin and selling of property and give the generated money to the creditor

Only applicable if there are two or more creditors

Question 7

Attachment

Answer 7

if no retention title or right of pledge. Attachment order allows credit provider to seize possessions and sell them to pay debt

This is done via court