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1.4.5 Was the Consumer in Default?

The consumer must be in default before the creditor can accelerate the debt or repossess the collateral.

  • • Was the consumer truly in default as defined by the contract and applicable law? For example, was the consumer rightfully withholding payments because of a breach of warranty? See § 4.1, infra.
  • • If the creditor habitually accepted late payments, did it give notice to the consumer that it would no longer do so? If it did not give notice, it may have waived its right to accelerate or repossess for late payments. See § 4.3, infra.
  • • Did the creditor comply with any state law (or, in the case of certain manufactured home sales, federal law) that requires notice and an opportunity to cure a default before acceleration or repossession? See § 4.2, infra.