(1) With respect to a secured or unsecured consumer credit transaction payable in two or more installments, except as provided in subsection (2), after a default consisting only of the consumer's failure to make a required payment, a creditor, because of that default, may neither accelerate maturity of the unpaid balance of the obligation, nor take possession of or otherwise enforce a security interest in goods that are collateral until twenty days after a notice of the consumer's right to cure (Section 37-5-110) is given. Until expiration of the minimum applicable period after the notice is given, the consumer may cure all defaults consisting of a failure to make the required payment by tendering the amount of all unpaid sums due at the time of the tender, without acceleration, plus any unpaid delinquency or deferral charges. Cure restores the consumer to his rights under the agreement as though the defaults had not occurred.
(2) With respect to defaults on the same obligation and subject to subsection (1), after a creditor has once given notice of consumer's right to cure (Section 37-5-110), this section gives the consumer no right to cure and imposes no limitation on the creditor's right to proceed against the consumer or goods that are collateral or which are rented or the lessor's right to recover the property. For the purpose of this section, in credit extended pursuant to a revolving charge or revolving loan account, the obligation is the unpaid balance of the account and there is no right to cure and no limitation on the creditor's rights with respect to a default that occurs within twelve months after an earlier default as to which a creditor has given a notice of consumer's right to cure (Section 37-5-110).
(3) Notwithstanding subsection (1), with respect to consumer rental-purchase agreements, with payments or options to renew which are monthly or less frequent than monthly, after a default consisting of failure to renew and failure to return the property, a lessor may not instigate court action to recover rented property until five days after the notice of the consumer's right to cure (Section 37-5-110) is given.
(4) Notwithstanding subsection (1), with respect to consumer rental-purchase agreements with payments or options to renew more frequently than monthly, after default consisting of failure to renew or return the property, a lessor may not instigate court action to recover rented property until three days after notice of the consumer's right to cure (Section 37-5-110) is given.
(5) With respect to all consumer rental-purchase agreements until expiration of the minimum applicable period after notice is given, the consumer may cure all defaults consisting of failure to renew and failure to return the property by tendering the amount of all unpaid sums due at the same time of the tender plus any unpaid delinquency charges or other charges authorized by Part 7, Chapter 2.
(6) This section and the provisions on waiver, agreements to forego rights, and settlement of claims (Section 37-1-107) do not prohibit a consumer from voluntarily surrendering possession of goods which are collateral or which are rented, and the creditor from thereafter accelerating maturity of the obligation and enforcing the obligation and his security interest in the goods at any time after default. In any enforcement proceeding, however, the creditor shall affirmatively plead and prove either that the notice to cure is not required or that the creditor has given the required notice, but the failure to so plead does not invalidate any action taken by the creditor that is otherwise lawful and if the creditor has rightfully repossessed any collateral the repossession does not constitute conversion.
(7) Any repossession of collateral or rented property in violation of this section is void and the creditor is liable for conversion.
HISTORY: 1976 Act No. 686 Section 39; 1982 Act No. 385, Section 45; 1984 Act No. 355, Section 9; 1985 Act No. 121, Section 14.