KRS 371.270: Delinquency and collection charge for installment defaults -- Refinancing

options.

(1) The holder of any retail installment contract, if it so provides, may collect a

delinquency and collection charge on each installment in default for a peri od of

more than ten (10) days in the amount not to exceed five (5%) percent of each

installment or fifteen dollars ($15), whichever is greater.

(2) The holder of a retail installment contract upon request by the buyer, may agree to

an amendment thereto to extend or defer the scheduled due date of all or any part of

any installment or installments or to renew, restate, or reschedule the unpaid

balance of the contract, and may collect for same a refinance charge not to exceed

an amount ascertained as provided under either of the following optional methods

of computation:

Option I. The refinance charge may be computed on the amount of the

scheduled installment or installments extended or deferred for the period of

extension or deferment at the rate of one and one-half percent (1.5%) per

month; provided that a minimum deferment charge of one dollar ($1) shall be

permitted. Such amendment may also include payment by the buyer of the

additional cost to the holder of premiums for continuing in force any

insurance coverages provided for in the contract until the end of such deferral

period, and of any additional necessary official fees.

Option II. The refinance charge may be computed as follows: The sum of the

unpaid balance as of the refinancing date and the cost f or any insurance and

other benefits incidental to the refinancing, and for any additional necessary

official fees and any accrued delinquency and collection charges, after

deducting a refund credit as for prepayment pursuant to subsection (2) of KRS

371.260, shall constitute a principal balance for such refinancing on which the

refinance charge may be computed for the term of the refinanced contract at

the applicable rate for finance charges. Acquisition costs under the refund

schedule in subsection (2) of KRS 371.260 shall not apply in calculating

refinance charges.

(3) The amendment to the contract must be confirmed in a writing signed by the holder.

The writing shall set forth the terms of the amendment and the new due dates and

amounts of the installment s, and shall either be delivered to the buyer or mailed to

him at his address as shown on the contract. Said writing together with the original

contract and any previous amendments thereto shall constitute the retail installment

contract.