Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Collection law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
Every lender has had this experience: a customer defaults, you send a notice of right to cure, and right before the cure deadline, the customer comes in and pays the amounts due. Then, the next month, the same thing happens all over again. When can you stop giving them the opportunity to cure?
The traditional right to cure notice is sent when a loan is covered by the Wisconsin Consumer Act. Generally, that law controls loans of less than $25,000 made to a consumer for consumer purposes. If the loan with the always-late customer is covered by the Wisconsin Consumer Act, you are required to send the Notice of Right to Cure. However, once you have sent a Notice of Right to Cure two times in a 12-month period, and the customer has cured both times, you are no longer required to allow them this cure period. Meaning, you can accelerate the loan and put it into collection without offering the right to cure.
Understanding that, as a lender, you do not desire loans to go into collection, I usually advise lenders to communicate this law to the customers. If this situation arises, it would be wise to consult your attorney about your rights and possible mitigation communication with the customer.