Assignment:
"Loan default occurs when a borrower breaches a material term of their loan agreement. The most common reason for a loan default is that the borrower stops making loan payments" (Lesonsky, 2019). Default occurs the moment borrower did not comply with the payment terms agreed in the contract properly signed by the lender and the borrower. At that moment the lender can take legal action against the borrower in order to recover the due amount. A collateral is a "property subject to a security interest" (Mann & Roberts, 2017). When a loan agreement is guaranteed by a collateral asset, and the loan is in default, the lender after notify the borrower can take back (to repossess) the collateral asset, in order to recover the amount lend.
The arguments that Chrysler legally repossessed the automobile should be that lenders do not need a court order to repossess a collateral asset, they can start the process the moment the borrower miss a payment date. "In the case of a car loan, if you miss a payment, the bank could repossess the vehicle without notice. They can go on to your property to reclaim it as long as they don't use threats of force" (Debt.org, n. d.).
Therefore, although James responded by notifying Chrysler that he would make every effort to make up missed payments, that he did not want the car repossessed, and that Chrysler was not to enter his private property to repossess the vehicle, Chrysler had all the right to do so. Another argument they can use is that after James communicated to Chrysler that he would do his best in order to pay the loan, Chryster waited a few weeks before starting the repossession process, so although they were not obligated to wait for James to keep his word and pay, they gave him a chance to do it, but since he did not, they did the repossession. "Consumers need to understand that companies don't want to repossess the item in question, they always prefer to work out a payment arrangement. Often the arrangement may be better than the current situation he or she is in now" (Lovely, 2019).
The arguments that Chrysler illegally repossessed the automobile should be that after they notified James about the default and the possibility of repossession if he did not make the corresponding payment, he responded by notifying Chrysler that he would make every effort to make up missed payments, that he did not want the car repossessed, and that Chrysler was not to enter his private property to repossess the vehicle, therefore Chrysler should had waited longer before starting the repossession process, since they know James had all the intention to pay them. Additionally, when they went to his property to repossess the car, James did not physically challenge or threaten the repossessor.
James Koontz agreed to purchase a Plymouth Sundance from Chrysler Credit Corporation (Chrysler) in exchange for sixty payments of 5185.92. Koontz soon thereafter defaulted, and Chrysler notified Koontz that unless he made the payments, it would repossess the vehicle. Koontz responded by notifying Chrysler that he would make even- effort to make up missed payments, that he did not want the car repossessed, and that Chrysler was not to enter his private property- to repossess the vehicle A few weeks later, Chrysler sent the M & M Agency to repossess the vehicle. When he heard the repossession in progress, Koontz, dressed only in his underwear, came outside and yelled. "Don't take it!" The repossessor ignored him and took the car anyway. Koontz did not physically challenge or threaten the repossessor
1. Discuss the arguments that Chrysler legally repossessed the automobile.
2. Discuss arguments that Chrysler illegally repossessed the automobile.
2 to 3 paragraphs