Why would a loan company choose legal action over a reasonable solution?
1. Skip a couple months of payments and add them on to the end of loan (the company gets all of the money back borrowed including the 30% interest being charged)
2. Lower the interest rate which would lower monthly payments (the company gets back all of the money borrowed with a little less interest)
3. Freeze the interest rate (the company gets back all of the money borrowed)
They actually negotiate these types of terms rountinely. Most banks are not interested in forclosures. It is a last resort for them since it is not a cost effective solution for them.
I would have thought that if a company knows that a person can't afford the payments agreed on, then they should cut their losses and get back as much as they can. I know many companies will use legal action as a threat but don't carry it through. The reason being is that legal costs are so expensive whether they win or loose that there is no point in pursuing this line. So why this company is not accepting the terms you highlighted is a bit of a mystery - the only thing I can think of is that they are not convinced that the agreed payments cannot be met and so are refusing to accept less than the contract states.
The initial request to ‘skip’ a few payments and add them to the end of the loan was months ago, -(an attempt to stay on track while figuring out a plan before missing payments… seemed like the responsible thing to do… and there is absolutely no loss
Then I think this company are just being stupid and nasty!
Yes, they certainly can be vindictive. Saw a loan manager toss a heating stove out the door in the winter-time for late payments once. Outside of a crummy bed or two it was the only large item the poor family had in the house.
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