17:16C-68. Payment of time balance; extension of scheduled due date; options for computing additional charge

(a) Every home repair contract shall provide for the payment of the time balance in substantially equal amounts on dates separated by substantially equal payment-periods; except that the home repair contractor may defer the initial installment for a period of 60 days or for a period of 180 days on seasonal goods sold out of season; and, provided further, that when appropriate for the purpose of facilitating payment, in accordance with an owner's intermittent income, a contract may provide for payment on a schedule which reduces or omits payments over a period or periods not in excess of 93 days in any 12-month period or a contract may provide an installment schedule which reduces or omits payments over any period or periods of time during which period or periods the owner's income is reduced or suspended. When a home repair contract provides for unequal or irregular installments, the credit service charge shall not exceed the effective rate provided in section 8, having due regard for the schedule of installments.

(b) The holder of a home repair contract may extend the scheduled due date of any home repair contract and defer the scheduled due date of any or all installment payments, or reduce the amount of any or all installments and may, as a consideration therefor, make a total additional charge not to exceed the amount ascertained under either of the following methods of computation at the respective rates indicated by the following options:

Option 1. The additional charge shall be computed on the amount of the scheduled installment or installments extended, deferred or reduced, for the period or periods for which each installment or part thereof is extended, deferred or reduced, at the rate of 1% per month.

Option 2. The holder of a home repair contract may, by written agreement, renew the entire unpaid balance owing on a home repair contract and may make a charge therefor at the rate charged in the contract so renewed, from the date of renewal to the maturity of the final installment.

(c) The unpaid balances owing on two or more home repair contracts held by the same holder may be consolidated, and the consolidated balance may be paid in such installments and over such period of time as the owner and the holder of such home repair contracts may agree upon in writing. A credit service charge may be made based upon such consolidated balance within the limits imposed by section 8.

(d) The consolidation of the unpaid balances owing on two or more home repair contracts shall be effected by an agreement in writing which shall identify the home repair contracts affected by such consolidation by reference to the dates of their execution, the names of the parties thereto, and the location of the property or properties in connection with which the goods and services were furnished pursuant to such contracts. Such agreement shall state as separate items

(1) The unpaid balance owing on each of the contracts affected by the consolidation, and the total of such balances;

(2) The amount, if any, of the charge made pursuant to subsection (d) of section 6;

(3) The official fees;

(4) The consolidated balance, which is the sum of the unpaid balances as shown pursuant to paragraph (1) of this subsection, and the amounts shown pursuant to paragraphs (2) and (3) of this subsection;

(5) The credit service charge, which shall be computed pursuant to section 8, except that such charge shall be based upon the consolidated balance as shown pursuant to paragraph (4) of this subsection, instead of upon the principal balance as provided in section 8;

(6) The time balance, which is the sum of the consolidated balance as shown pursuant to paragraph (4) of this subsection and the credit service charge, as shown pursuant to paragraph (5) of this subsection, the number of installments required, the amount of each installment, and the due dates thereof.

(e) For the purposes of this section, "unpaid balance owing" on a home repair contract means the amount which would be required to pay the contract in full if such payment were made on the day when an agreement is entered into pursuant to Option 2 of subsection (b) of this section, or a consolidation of balances is effected pursuant to paragraph (d) of this subsection. In computing the amount of the unpaid balance owing on a contract, a credit shall be allowed according to the formula provided by section 12, except that, in applying such formula, no deduction for an acquisition charge shall be taken.

L.1960, c. 41, p. 167, s. 7. Amended by L.1966, c. 325, s. 3, eff. Feb. 16, 1967; L.1968, c. 193, s. 1, eff. July 19, 1968; L.1973, c. 33, s. 1, eff. Feb. 21, 1973.