CASE Arnold owns a vehicle presently worth $10,000.00 on which he has granted a registered Specific Security Agreement to Bob to secure a loan which presently has a $20,000.00 balance. Three months ago he stopped making the required $500.00 per month payments to Bob. What options does Bob have to recover the debt now that Arnold has defaulted? What options does Arnold have to get himself out of this situation? Ans. When a borrower defaults on a loan, the lender has various options to recover the debt. In this scenario, Bob, the lender, can either repossess the vehicle and sell it to pay off the loan or take legal action against Arnold for the outstanding balance. On the other hand, Arnold can negotiate with Bob to change the terms of the loan, sell the vehicle to settle the loan, or file for bankruptcy to clear the debt. It is crucial for Arnold to take prompt action to prevent Bob from pursuing further legal actions.
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