Section 24-4.5-7-406 - Borrower's default; permissible and prohibited remedies; notice to borrower(1) An agreement with respect to a small loan may not provide for charges as a result of default by the borrower other than those specifically authorized by this chapter. A provision in a small loan agreement in violation of this section is unenforceable.(2) A lender or an assignee of a small loan may seek only the following remedies upon default by a borrower:(a) Recovery of: (i) the contracted principal amount of the loan; and(ii) the loan finance charge.(b) If contracted for under section 202 of this chapter, collection of a fee for: (i) a returned check, negotiable order of withdrawal, or share draft; or(ii) a dishonored authorization to debit the borrower's account; because of insufficient funds in the borrower's account.
(c) Collection of postjudgment interest, if awarded by a court.(d) Collection of court costs, if awarded by a court.(3) A lender or an assignee of a small loan may not seek any of the following damages or remedies upon default by a borrower:(a) Payment of the lender's attorney's fees.(c) Prejudgment interest.(d) Damages allowed for dishonored checks under any statute other than this chapter.(e) Any damages or remedies not set forth in subsection (2).(4) A contractual agreement in a small loan transaction must include a notice of the following in 14 point bold type:(a) The remedies available to a lender or an assignee under subsection (2).(b) The remedies and damages that a lender or an assignee is prohibited from seeking in a small loan transaction under subsection (3).Amended by P.L. 60-2016, SEC. 5, eff. 3/21/2016.As added by P.L. 38-2002, SEC.1. Amended by P.L. 73-2004, SEC.29; P.L. 10-2006, SEC.18 and P.L. 57-2006, SEC.18; P.L. 90-2008, SEC.16.