When a debtor fails to pay on a loan, the creditor is required by Wisconsin law to give that person every chance possible to pay. These laws are put into place to protect consumers from tarnishing their credit records and to help businesses to collect all of the money due them. This "right to cure" gives debtors the opportunity to bring themselves up to date on their loan.
The right to cure is a document that a creditor must send to someone who has become behind on their payments, giving that debtor the opportunity to correct the situation. This typically involves making a payment equal to the amount that is past-due within a certain amount of time. Failure to do so will result in defaulting on the loan and possibly losing the item that the loan covers, such as a car or a house.
Wisconsin law demands that specific information be included with a right-to-cure default notice. The creditor's full name, address and telephone number must be included so that the debtor knows where to send a payment or who to contact with questions. The total amount due must be included, along with an itemized statement detailing any late fees or other charges that have been added. The notice should also spell out any other actions that the debtor needs to take, as well as a date by which all actions must be completed to prevent default.
In Wisconsin, a creditor can set any amount of time by which a payment must be completed. A right to cure must give a debtor at least 15 days to complete all actions. Once the right-to-cure notice has been mailed, the creditor cannot speed up the process. The creditor cannot repossess any item until the amount of time given in the right to cure has passed.
Cure the Default
All actions in a right to cure must be completed for the debtor to make things right. For instance, if you are three months behind on your car payment, the right to cure comes from the loan company giving you the total owed. A portion of what is owed is late fees for the missed payments and processing fees. If you pay the three car payments that you missed but do not pay the late and processing fees that were part of the right to cure, the creditor still has the right to repossess the car.