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?
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.