Title 6
Commercial Law — General Regulatory Provisions

Chapter 51
The Rhode Island Automobile Repossession Act

§ 6-51-3. Default, notice, right to cure, reinstatement.

(a) The default provisions of a consumer automobile lease or automobile loan agreement are enforceable only to the extent that:

(1) The consumer does not make one or more payments required by the lease or loan agreement; or

(2) The lessor or secured party establishes that the prospect of payment, performance, or realization of the lessor’s or secured party’s interest in the automobile is significantly impaired.

(b) After a default under an automobile lease or loan agreement by the consumer, the lessor or secured party may not accelerate, take judicial action to collect, or repossess the automobile until the lessor or secured party gives the consumer the notice required by this section and the consumer does not cure the default in the time allowed under this section. A lessor or secured party may initiate a procedure to cure by sending to the consumer, at any time after the consumer has been in default for ten (10) days, a notice of the right to cure the default. Said notice shall be delivered via certified mail, return receipt requested, or via first-class mail, at the consumer’s address last known to the lessor or secured party. The time when notice is given shall be deemed to be upon actual delivery of the notice to the consumer or three (3) business days following the mailing of the notice to the consumer at the consumer’s address last known to the lessor or secured party.

(c) The notice shall be in writing and shall conspicuously state the rights of the consumer upon default in substantially the following form:

The heading shall read: “Rights of Defaulting consumer under Rhode Island General Laws.” The body of the notice shall read: “You may cure your default in (describe automobile lease or loan agreement in a manner enabling the consumer to identify it) by paying to (name and address of lessor or secured party) (amount due) before (date that is at least twenty-one (21) days after notice is delivered). If you pay this amount within the time allowed you are no longer in default and may continue with the automobile (lease or loan) agreement as though no default has occurred.

If you do not cure your default by the date stated above, the lessor or secured party may sue you to obtain a judgment for the amount of the debt and may take possession of the automobile.

If the lessor or secured party takes possession of the automobile, you may get it back by paying the full amount of your debt plus any reasonable expenses incurred by the lessor or secured party if you make the required payment within twenty (20) days after the lessor or secured party takes possession.

If (the secured party) sells the vehicle repossessed from the consumer for an amount exceeding the amount outstanding on the automobile (loan) agreement including reasonable expenses related to judicial action and or repossession, the excess funds shall be returned promptly to the defaulting consumer.

You have the right to cure a default only once in any twelve-month (12) period during the period of the automobile (lease or loan) agreement. If you default again within the next twelve (12) months in making your payments, we may exercise our rights without sending you another right to cure notice. If you have questions, telephone (name of lessor or secured party) at (phone number).”

(d) Within the period for cure stated in the notice under this section, the consumer may cure the default by tendering the amount of all unpaid sums due at the time of tender, including any unpaid delinquency or default charges, but without additional security deposit or prepayment of period payments not yet due. Cure restores the rights of the lessor or secured party and consumer under the automobile loan or lease agreement as if the default had not occurred.

(e) A consumer has the right to cure only once in any twelve-month (12) period during the period of the automobile lease or loan agreement.