In the case of default by the lessee
In the case of default by the lessee, the bank or lease company may take various actions depending on the specific terms of the contract and the severity of the default. Here are some common actions that may be taken:
Collection efforts: If the lessee has missed one or more payments, the bank or lease company may attempt to collect the outstanding balance through phone calls, letters, or other collection efforts.
Lease termination: If the lessee has consistently failed to make payments, the bank or lease company may terminate the lease agreement and repossess the asset. The bank or lease company may sell the asset to recover any outstanding balance.
Legal action: If the lessee has defaulted on the contract and refuses to pay, the bank or lease company may pursue legal action to recover the outstanding balance. This may involve filing a lawsuit or seeking a judgment against the lessee.
Credit reporting: If the lessee defaults on the contract, the bank or lease company may report the delinquency to credit reporting agencies, which can impact the lessee's credit score and ability to obtain credit in the future.
It's important to note that banks and lease companies typically have specific policies and procedures in place for handling default situations. It's also important for lessees to understand their contractual obligations and seek assistance or communicate with the bank or lease company if they are experiencing financial difficulties.