Unless the buyer has notice of actual or intended assignment of a contract or installment account, payment thereunder made by the buyer to the last known holder of such contract or installment account, shall to the extent of the payment, discharge the buyer’s obligation.
Retail Installment SalesPayments
Section § 1806.1
If a buyer pays money toward a contract or installment account, and they don't know that the contract is being or will be assigned to someone else, their obligation to pay is considered fulfilled by that payment, as long as it's made to the last person they know holds the contract.
buyer payment assignment notice contract discharge
Section § 1806.2
If you have a contract where payments are recorded in a passbook or payment book, you can ask for a detailed statement showing what you still owe. You can request this once a year for free, but if you need more, it will cost no more than a dollar each time. This must be done within a year of the last payment.
At any time after its execution, but not later than one year after the last payment thereunder, the holder of a contract shall, upon written request of the buyer made in good faith, promptly give or forward to the buyer a detailed written statement which will state with accuracy the total amount, if any, unpaid thereunder. Such a statement shall be supplied by the holder once each year without charge; if any additional statement is requested by the buyer, the holder shall supply such statement to the buyer at a charge not exceeding one dollar ($1) for each additional statement supplied to the buyer. The provisions of this section shall apply only to those
transactions wherein, instead of periodic statements of account, the buyer is provided with a passbook or payment book in which all payments, credits, charges and the unpaid balance is entered.
contract holder written request detailed statement
Section § 1806.3
If you have a contract and decide to pay off the money you owe early, you can do so without any penalty. There are rules about what happens to any leftover finance charge, which depends on how it was calculated. If it was calculated based on all interest upfront, you may get a refund for the part you didn't use. If it was calculated on simple interest, you pay what you owe up to that point. Also, if the contract ends early because of things like giving back the item you bought, repossession, or legal judgments, your remaining debt is determined the same way. This rule doesn't stop any other late fees allowed by law from being collected.
(a)CA Civil Law Code § 1806.3(a) Notwithstanding any provision of a contract to the contrary, the buyer may pay at any time before maturity the entire indebtedness evidenced by the contract without penalty. In the event of prepayment in full:
(1)CA Civil Law Code § 1806.3(a)(1) If the finance charge was determined on the precomputed basis, the amount required to repay the contract shall be the outstanding contract balance as of that date, provided, however, that the buyer shall be entitled to a refund credit in the amount of the unearned portion of the finance charge. The amount of the unearned portion of the finance
charge shall be at least as great a proportion of the finance charge, or if the contract has been extended, deferred, or refinanced, of the additional charge therefor, as the sum of the periodic monthly time balances payable more than 15 days after the date of prepayment bears to the sum of all the periodic monthly time balances under the schedule of installments in the contract or, if the contract has been extended, deferred or refinanced, as so extended, deferred or refinanced. Where the amount of the refund credit is less than one dollar ($1), no refund credit need be made by the holder. Any refund credit in the amount of one dollar ($1) or more may be made in cash or credited to the outstanding obligations of the buyer under the contract.
(2)CA Civil Law Code § 1806.3(a)(2) If the finance charge or a portion thereof was determined on the simple-interest basis, the amount required to prepay the contract shall be the outstanding contract balance as of that date, including
any earned finance charges which are unpaid as of that date, and provided further that in cases where the finance charge or a portion thereof is determined on the 360-day basis, the payments theretofore received will be assumed to have been received on their respective due dates regardless of the actual dates on which those payments were received.
(b)CA Civil Law Code § 1806.3(b) Notwithstanding any provision of a contract to the contrary, whenever the indebtedness created by any retail installment contract is satisfied prior to its maturity through surrender of the collateral, repossession of the collateral, redemption of the collateral after repossession, or any judgment, the outstanding obligation of the buyer shall be determined as provided in subdivision (a); provided further that the buyer’s outstanding obligation shall be computed by the holder as of the date the holder recovers the value of the collateral through disposition thereof or judgment is entered or, if
the holder elects to keep the collateral in satisfaction of the buyer’s indebtedness, as of the date the holder takes possession of the collateral.
(c)CA Civil Law Code § 1806.3(c) This section does not preclude the collection or retention by the holder of any delinquency charge made pursuant to Section 1803.6.
prepayment finance charge outstanding balance
Section § 1806.4
Once a buyer has paid off everything they owe on a contract, they can ask to get proof that their debt is fully paid, and any security interest in the goods tied to the contract is released. The holder of this contract has to provide this proof, either by mail or delivery, to the buyer's last known address.
After the payment of all sums for which the buyer is obligated under a contract and upon demand made by the buyer, the holder shall deliver, or mail to the buyer at his last known address, such one or more good and sufficient instruments as may be necessary to acknowledge payment in full and to release all security in the goods under such contract.
payment in full buyer demand release of security
