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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 89390
Experience:  Attorney experienced in commercial litigation.
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I have a retail installment contract governed by New York State

Customer Question

I have a retail installment contract governed by New York State Law for a farm RTV through manufacturer's captive finance company (the "Lender"). I did not make a payment on time, and in fact called Lender to make the past due payment and current payment approximately 57 days after the the late payments due date. My contact permits that the lender can default and pursue all remedies if one payment is late. Therefore, Lender sent the loan to a collections firm (the "Collector"), who is demanding that I pay the full amount of the loan plus collection fees of 13.5%, totaling approximately $11,000, immediately, or they will repossess the RTV. Under the remedies section, the Lender may seek the entire balance or repossess. Under the repossession section, it states that The Lender may repossess the Property if I am in default, but that before the sale date, the lender must notify me of the planned date of sale. Furthermore, it states that until the property is sold, I have the right to get my Property back if I (1) pay Lender all installments due or past due at the time of delivery of the Property back to me, (2) pay all unpaid late charges, (3) cure any other defaults that may have occurred and (4) pay Lender all expenses of retaking, repairing and storing the vehicle.

The Collector is demanding the full amount immediately or he will take the Property. He is incredibly aggressive. I pointed out to him that I have the right to get my Property back by paying the past due payments, etc, but he says that does not matter and that he will repossess it and I cannot get it back. I continually point out to him the clause under repossession, and he ignores it.

So...a few questions. (1) Do I have the right to "reinstate" my contract under NY law provided I make the payment outlines above to get my Property back; (2) what are my rights if the Collector is ignoring my rights under the contact; (3) what legal actions should I take?

If I have the right to get my property back and reinstate by paying $1500 (approximately), I do not understand while he will not allow me to just make the payment and stop this process.
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

NY law that governs this is NY contract law, which states that your contract would be honored by the courts and enforced as written. This means that if your contract has a right to cure clause, which is what you described above, the lender (and their agent who is the collection agency) has to honor the contract terms as written. The collection agent refusing to honor the contract as written is a violation of the Fair Debt Collection Practices Act and you can file a complaint against them with the Federal Trade Commission and also you can send them (both the lender and the collection agent) a written demand to cure and attach your contract and tell them in the letter that their failure to honor the terms of the contract will result in suit against them for violation of the Fair Debt Collection Practices Act and for breach of contract and attorney's fees as provided for in the Act as well.

If they refuse to honor the contract as written you will need to sue the lender for breach of contract and seek your damages from them for not honoring the contractual terms you were granted.



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Law Educator, Esq., Lawyer
Satisfied Customers: 89390
Experience: Attorney experienced in commercial litigation.
Law Educator, Esq. and 7 other Consumer Protection Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you for your answer. The be precise, the right to cure is only after repossession, and not after default. So, at this time, the Collector is aggressively pursuing that or he will repossess. There appears to be somewhat of a disconnect in the contract, since the lender can demand full payment OR repossess, and I don't have a right to cure unless the lender (or agent) repossesses (which as I stated the agent says I do not have the right to do under any circumstance).


 


However, wouldn't a reputable collection company allow me to cure now even though he has not yet repossessed? I feel like he is doing this just to get a higher collection fee. I my complaint valid at this time (since repossession has not occurred)?

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your clarification, as I thought they had already repossessed the vehicle.

There are very few if any "reputable" collection agencies, they are all low lives and it just depends on the degree they bend the laws. However, the objective of the collection agency is to make as much money for their agency as possible and that is done by making the debtor pay as much as possible, so it is to their advantage to make you pay the whole amount.

I am afraid though if repossession has not occurred, you need to negotiate this with the lender directly and avoid the collection agent. If they will not negotiate, then you would have to obtain an attorney to take them to court or you would have to let the repossession occur and then go to court to recover the vehicle based on breach of contract (it is best to go to court before the repossession and attack them for breach of contract to force them to allow you to cure the breach).
Customer: replied 1 year ago.

Thank you. I assume that the lender/collector believes that I might as well just give up since the cost and time of pursuing them would be high. If I prevail, would the lender have to pay my legal costs?


 


Also, the is a required arbitration clause in my agreement. Would an arbitration filing now stop the repossession?

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

These collection agencies are really just scum, most times the lender has no idea that they are denying accepting catching up the payments to reinstate the loan. If you have an arbitration clause in the contract, you could not file your breach of contract as a suit, you have to file it as arbitration I am afraid as the court will not take a case that has an arbitration clause The lender would have to pay your legal costs only if the arbitrator finds they were in bad faith in not allowing you to cure or if your contract provides for payment of attorney's fees to the winning party.
Customer: replied 1 year ago.

So, since the collector is telling me that if I don't advise him of the location of the equipment and have it returned immediately he will sue me, he is just trying to pressure me, since he too is bound by arbitration, right?


 


Is calling the lender and telling them I am engaging a lawyer and filing a complaint with the FTC against them and the collector give me any negotiation power, or does a threat (or reality) like this not even hold any weight?


 


 

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your follow up.

He is just making idle threats as he cannot sue he has to file for arbitration and he is too dumb to probably know that. I would not tell him anything and I would contact the lender to deal with them directly.

Telling the lender you are filing a complaint really does not help get them to negotiate more. You need to simply file the complaint with the FTC against the collection agency and get the lender on the phone and negotiate reinstatement of the loan with them and anything you negotiate with them get in writing.
Customer: replied 1 year ago.

Thank you. BTW, you are incredibly helpful. A few more questions:


 


1. When I called to make my past due payment and current payment (a month or so ago), the lender told me they would not speak to me and to call the collector. Perhaps I should call and speak to the manager and avoid the first line rep? Thoughts on anything I can say to make them speak with me?


 


2. How quickly does the FTC get involved? Is it a matter of hours, day, months, etc?


 


Thank you.

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

1) Yes, usually customer service people know nothing about these matters once they are sent to collections. You need to speak to supervisors about reinstating the loan and making the payment. You need to also send them a letter informing them that as the contract allows you to reinstate the loan by making payment upon repossession, they are in bad faith to collect more money and that it is an unfair and deceptive practice and you will have to consider suing them over that practice if they refuse to let you reinstate without having to let them repossess first as the contract does give you reinstatement rights.

This is all about your negotiation skills and getting the right supervisor at the lender who can get this done for you.

2) The FTC can take at least 30 days to get involved, but file your complaint and then call them to follow up to see about them getting involved sooner.
Customer: replied 1 year ago.

Thank you, Paul. Is there a way I can contact you for further assistance, and can you be engaged to assist me if necessary?

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

You can ask for me directly in your question opening line or heading and I will get to you. Unfortunately, the site rules forbid the experts of this site from engaging in representation of any customers and I do apologize for that, but if you need an attorney you would have to engage a local consumer protection attorney at the same sites used by other attorneys, http://www.martindale.com or http://www.lexmundi.com or http://www.hg.org
Customer: replied 1 year ago.

Thank you.

Expert:  Law Educator, Esq. replied 1 year ago.
You are welcome

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