Can I do anything as a lienholder if the buyer never makes payments on time?
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Can I do anything as a lienholder if the buyer never makes payments on time?
I sold my car to a friend 8 months ago. Payments are due the 15th of every month. They have only made one payment on time. We had papers notarized but I didn’t have anything about late payments on that document. What are my options? Is there a state law about that somewhere? I can’t legally take the car back, because eventually the payments get made.
Asked on August 16, 2011 Colorado
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If your purchase agreement with the friend for your car is silent about late payments and other matters normally included in similar agreements concerning the purchase and sale of automobiles, youshould consider drafting an addendum to the existing agreement containing:
1. a late payment penalty of 5% or so of the purchase price if the monthly payment is not made by the 15th of each month;
2. any other terms that you forgot to include in the initial agreement.
Your friend is not obligated to sign the addendum with the late payment penalty, but it is worth an attempt. Under state law, if an installment payment is not made on time, custom and practice is for the person owed the payment to send written notice to the person making the payments stating that payment needs to be made by a certain date and if not made, then the purchase agreement is deemed breached.
Good luck.
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