Enforcement Flashcards
Repossession
After DEFAULT, creditor can repossess without notice and by any means AS LONG AS it does not breach the peace
Breach the Peace
Debtor yelling get out of here, using a policeman or others as intimidation
Result of breach of peace
Creditor has to return property
Repossession of Accounts Owed to Debtor
Can be repossessed, and once demand by creditor has been made, the third party cannot satisfy their obligation by paying debtor
Redemption
Debtor can redeem collateral by paying off debt AND costs associate with repo - MUST be done before right is foreclosed
Foreclosure
Sale of collateral - MUST be commercially reasonable which is NOT solely judged by PRICE
At these sales can Creditor bid?
Yes - but must be item for which a recognized market establishes the price (gold, oil, stocks)
Notice
Must provide notice to: 1) debtor; 2) secondary obligors (if any); 3) if not consumer goods, parties whom creditor knows have interests in the collateral
Must be reasonably timely
Proceeds
Go to (in this order): 1) costs of sale; 2) creditor; 3) other secured who notify creditor; 4) excess is returned to debtor If NOT enough, then creditor can get deficiency judgment
Strict Foreclosure
Creditor agrees to buy collateral from debtor
Involves proposal; notice to other creditors; Assent - satisfied if no objection made w/in 20 days by notice parties.
Consumer Exceptions
1) Must be full satisfaction of debt; 2) Collateral cannot be in debtor’s possession at time of proposal; 3) CANNOT happen if debtor has paid 60% of principal amount of secured loan
Remedies for Creditor’s failure
actual damages for anyone injured
Loss of Deficiency
Creditor must prove it complied and deficiency still exists
Statutory damages in Consumer Case
Every violation in consumer case results in damage award of at least 10% of the original principal plus all interest paid over life of loan
