As a lender, you want to avoid losing money on a transaction if a debtor defaults on the loan. Through a secured transaction, you can repossess the property used to secure a loan and sell the property to recoup your losses. However, a debtor could still get the property back under Ohio law.
Per state law, your debtor can cure the default no more than 20 days after you retake the property or 15 days after you provide a default notice to the debtor, whichever happens later. Before the debtor can take the property back, Ohio law gives you the right to receive the following from the debtor.
Required delinquent payments
Your debtor should provide you with all past due amounts as well as any incurred charges for being late with the payments. Additionally, your debtor should pay you any deferred amounts.
State law also requires that the debtor give you a bond or cash payment equaling two future installments that the debtor would have to make on the property. This is to help avoid a second default.
Payments for repossessing the property
You may have paid towing and transport fees to repossess the property from the debtor. Under Ohio law, you have the right to receive actual and reasonable compensation for your expenses. Additionally, state law also allows you to add repossession costs above $25 to the time balance.
While the law gives you important rights to avoid losing money to repossession fees, you can also establish specific terms for curing a default in your lending contract. Between the law and your legal agreements, you should have ample protection for your financial interests.
