Last month, Steelville Bank loaned Marcus Jones $13,000 to purchase a used 2003 Impala from Tom’s Used Car Lot. The loan was to be paid back in 13 equal monthly installments. Marcus signed a security agreement which stated that Steelville Bank could accelerate the balance of the contract in the event of a default, and that after acceleration, Marcus was not entitled to reinstatement.
After making payments for six months, Marcus defaulted on his next payment. After he failed to make payments for the following 2 months as well, Steelville Bank sent notice demanding payment of the remaining balance of the loan within 30 days of receipt of notice, or repossession would result. Two days after receiving notice, Marcus paid $3,000 of the remaining $7,000 in unpaid debt to satisfy the missed payments (without any condition on his payment of the missed three installments). Steelville Bank accepted the payment and after 30 days sent agents to Marcus’s home where it repossessed the vehicle located on the street in front of Marcus’s home.
Which statement is correct?
1. Steelville Bank did not have authority to repossess the vehicle if the Bank had failed to perfect its security interest by filing a UCC-1 financing statement.
2. Marcus was allowed to keep possession of the vehicle because he began to satisfy the remaining payments with in the 30 days’ notice.
3. Marcus can sue for damages for breach of peace because Steelville Bank's agents repossessed the vehicle in front of Marcus’s home.
4. Steelville Bank was within its legal right to accelerate payment and ultimately repossess the vehicle.