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April 17, 2024 Clear | 48°F
The 193rd General Court of the Commonwealth of Massachusetts

Section 13I: Default under consumer credit transactions; enforcement; notice; curing of default; deficiency judgment

Section 13I. (a) In any consumer credit transaction involving a loan that is secured by a non-possessory security interest in consumer goods a provision relating to default is enforceable only to the extent that the default is material and consists of the debtor's failure to make one or more payments as required by the agreement, or the occurrence of an event which substantially impairs the value of the collateral.

(b) After a default under a consumer credit transaction by a debtor the secured creditor may not bring an action against the debtor or proceed against the collateral until he gives the debtor the notice required by this section. Said notice shall be deemed to be delivered when delivered to the debtor or when mailed to the debtor at the debtor's address last known to the creditor. If a debtor cures a default after receiving such notice and again defaults, the creditor shall give another notice before bringing action or proceeding against the collateral with respect to the subsequent default, but no notice is required in connection with a subsequent default if, within the period commencing on the date of the consumer credit transaction subject to this section and the date of the subsequent default, the debtor has cured a default after notice three or more times.

(c) The notice shall be in writing and shall be given to the debtor ten days or more after the default. The notice shall conspicuously state the rights of the debtor upon default in substantially the following form:

The heading shall read:—''Rights of Defaulting Debtor under Massachusetts Law.'' The body of the notice shall read:—''You may cure your default in (describe transaction in a manner enabling debtor to identify it) by paying to (name and address of creditor) (amount due) before (date which is at least twenty-one days after notice is mailed). If you pay this amount within the time allowed you are no longer in default and may continue with the transaction as though no default had occurred.

If you do not cure your default by the date stated above, the said creditor may sue you to obtain a judgment for the amount of the debt or may take possession of the collateral.

If the said creditor takes possession of the collateral, you may get it back by paying the full amount of your debt plus any reasonable expenses incurred by the said creditor if you make the required payment within twenty days after he takes possession.''

(d) No court shall enter a deficiency judgment against a debtor which includes a finance charge or insurance premiums allocable to instalments due after repossession. A debtor whose goods have been repossessed shall not be liable in a civil action for a deficiency unless the secured party files an affidavit signed either by the purchaser at the sale or by the secured party stating the price for which the goods were sold and the date and place of sale. Such affidavit shall be filed with the complaint.

(e) Unless the secured creditor has first notified the debtor that he has elected to accelerate the unpaid balance of the obligation because of default, brought action against the debtor, or proceeded against the collateral, the debtor may cure a default consisting of a failure to pay money by tendering the amount of all unpaid sums due at the time of tender, without acceleration, plus any unpaid delinquency or deferral charges. Cure shall restore the debtor to his rights under the agreement as though the defaults cured have not occurred, subject to the provisions of subsection (b).