Legal Question in Consumer Law in Massachusetts

My son has a car loan thru American Honda Finance Corp. My husband is a co-signer on the loan. My son has paid more than 40 payments on this car over the past 3 years without any incident. My son is 26 years old. The monthly car payment is $224.48. It is due on the 27th of each month.

My son lost his job in January 2009 and my husband has helped to keep the loan current since January 2009. I will admit that not all the payments were on time. My husband is a self-employed handyman and winters are a slow time for him. In June the account was up to date. In July my son got a part time job. His scheduled hours varied each week. My husband handed the account back over to my son for him to continue payments.

We were notified by certified mail that the account is in arrears of $468.96. Honda has given us until September 23 to pay the balance or they will seek legal action to obtain the money and/or reposess the vehicle. We told our son that he needs to make arrangements with Honda to bring the account up to date.

On Monday 8/31, he mailed a payment of $100. Today, 9/5 he would send another $100 from this weeks paycheck, and between now and September 23, he would fulfill the obligation of the $468.96. At that time his September payment will be due on 9/27. He will probably be late, but he will be able to make a full payment of $224.48 during the month of September. He was notified at work that as of the end of September he will be employed full time instead of part time.

Today, September 5 while my son is at work we received a telephone call from Honda Finance. My husband returned the call and explained the arrangements we needed, but was told that we were not to mail any installments on the account. They need their money in full by the 23rd. They said in review it would look like my son could not afford the loan. My husband said he just needs time to get caught up on his bills. He has faithfully paid his car loan in the past. In this economy things have changed. The Honda statement we receive each month states,"contact us for payment arrangements and other options". Their other option is for my husband to put this bill on a credit card. We have no intention of doing this. It is important that my son complete this obligation.

Can Honda Finance refuse payments made to them for this obligation? Please advise. Thank you for your time.

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