(1)With respect to a consumer credit
transaction, the parties may contract for a delinquency charge on any installment
or minimum payment not paid in full within ten days after its scheduled due date in
an amount not exceeding:
(a)Fifteen dollars for a transaction not secured by an interest in land; except
that, if the transaction is precomputed, the amount may not exceed the greater of
fifteen dollars or the deferral charge described in section 5-2-204 (1) that would be
permitted to defer the unpaid amount of the installment for the period that it is
delinquent; or
(b)Five percent of the unpaid amount of the installment or minimum
payment due for a transaction secured by an interest in land.
(2)A delinquency charge under this section may be collected only once on
an instal
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(1) With respect to a consumer credit
transaction, the parties may contract for a delinquency charge on any installment
or minimum payment not paid in full within ten days after its scheduled due date in
an amount not exceeding:
(a) Fifteen dollars for a transaction not secured by an interest in land; except
that, if the transaction is precomputed, the amount may not exceed the greater of
fifteen dollars or the deferral charge described in section 5-2-204 (1) that would be
permitted to defer the unpaid amount of the installment for the period that it is
delinquent; or
(b) Five percent of the unpaid amount of the installment or minimum
payment due for a transaction secured by an interest in land.
(2) A delinquency charge under this section may be collected only once on
an installment or minimum payment however long it remains in default. No
delinquency charge may be collected if the installment or minimum payment has
been deferred and a deferral charge described in section 5-2-204 has been paid or
incurred until ten days after the deferred due date. A delinquency charge may be
collected at the time it accrues or at any time thereafter.
(3) No delinquency charge may be collected on an installment or minimum
payment that is paid in full within ten days after its scheduled installment due date
even though an earlier maturing installment, minimum payment, or a delinquency
charge on an earlier installment or minimum payment may not have been paid in
full. For purposes of this subsection (3), payments are applied first to current
installments or minimum payments due and then to delinquent installments or
minimum payments due.
(4) (a) A creditor who has imposed a delinquency charge shall notify the
consumer in writing of the amount of the delinquency charge assessed as follows:
(I) Before the due date of the next scheduled payment;
(II) If the creditor provides the consumer with periodic statements for each
installment, on or with the next periodic statement provided to the consumer after
the delinquency charge has been assessed; or
(III) For a revolving credit account for which a credit card is issued and that is
not secured by an interest in land, before, on, or with the next periodic statement
after the delinquency charge has been assessed.
(b) A creditor shall not assess a delinquency charge unless the delinquency
charge is assessed within thirty days after the scheduled due date of any
installment not paid in full or, for a revolving credit account for which a credit card
is issued and that is not secured by an interest in land, within ninety days after the
scheduled due date of the delinquent minimum payment.
(5) No finance charge may be assessed on any delinquency charge. For
purposes of this section, for revolving credit, an installment is the minimum
payment that the debtor is required to make during any billing cycle excluding any
past-due amount from any previous billing cycle.
(6) If two installments or parts thereof of a precomputed transaction are in
default for ten days or more, the creditor may elect to convert the transaction from
a precomputed transaction to one in which the finance charge is based on unpaid
balances, and the terms of the converted transaction shall be no less favorable to
the consumer than the terms of the original transaction. In this event the creditor
shall make a rebate pursuant to the provisions on rebate upon prepayment
contained in section 5-2-211 as of the maturity date of the first delinquent
installment and thereafter may make a finance charge as authorized by the
provisions on finance charges. The amount of the rebate shall not be reduced by the
amount of any permitted minimum charge described in section 5-2-201. If the
creditor proceeds under this subsection (6), any delinquency or deferral charges
made with respect to installments due at or after the maturity date of the first
delinquent installment shall be rebated and no further delinquency or deferral
charges shall be made.