Legal Question in Credit and Debt Law in California

Re: collections law

You'll need to read your loan agreement to see if it contains language which says that they have the right to "accelerate" your loan on repossession. Accelerating your loan means calling the entire amount of principle, interest and fees due on some event of default. Most contracts I've seen actually have an acceleration clause on the first repossession, though they may have a policy that says they won't accelerate the entire amount due on the loan until you are repossessed twice. Your best recourse is to contact the lender, and beg and plead your case. It is possible that they have the legal right to require payment in full, and the only way around that is either file bankruptcy (in a Chapter 13 you can reinstate the car loan and cure the payment default over time), or beg and plead for an exception to their rules.

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