Delaware Code Title 5 Sec. 2255 – Workout agreement
(a) If a title loan borrower fails to repay the loan in accordance with the original provisions of the loan or any rollover of the loan, a licensee shall not take possession of the motor vehicle that is used as security for that loan or file suit on the loan until the licensee offers the borrower a workout agreement. Every workout agreement shall require a net reduction of at least 10% of the outstanding and unpaid indebtedness on the loan every month. A borrower shall have at least 10 business days to accept a workout agreement before the licensee takes possession of the motor vehicle.
Terms Used In Delaware Code Title 5 Sec. 2255
- Month: means a calendar month, unless otherwise expressed. See Delaware Code Title 1 Sec. 302
- Rollover: means the extension of an outstanding and unpaid indebtedness beyond the originally stated repayment period. See Delaware Code Title 5 Sec. 2250
- Title loan: means a loan made to one or more natural persons by a licensee and secured by the title to a motor vehicle, which loan is not used for the purpose of purchasing the vehicle that is used as security and which loan has an originally stated repayment period of 180 days or less. See Delaware Code Title 5 Sec. 2250
- Workout agreement: means an agreement for repayment of the outstanding and unpaid indebtedness on a title loan. See Delaware Code Title 5 Sec. 2250
(b) A title loan borrower who enters into a workout agreement with a licensee shall not be considered in default of the loan, and a licensee shall not take possession of a motor vehicle that is used as security for that loan or file suit against the borrower, unless the borrower defaults under the workout agreement.