16a-2-505.   (UCCC) Finance charge on consolidation.(1) If a consumer owes an unpaid balance to a creditor with respect to aconsumer credit transaction and becomes obligated on another consumercredit transaction with the same creditor, the parties may agree to aconsolidation resulting in a single schedule of payments. The parties may agree toadd the unpaid amount of the amount financed and accrued charges on thedate of consolidation to the amount financed with respect to the subsequentconsumer credit transaction.

      The creditor may contract for and receive a financecharge as provided in subsection (2) based on the aggregate amount financedresulting from the consolidation.

      (2)   If the debts consolidated arise exclusively from consumer creditsales the transaction is a consolidation with respect to a consumer creditsale and the amount of the finance charge is governed by the provisions onfinance charge for consumer credit sales other than open end credit(section 16a-2-201). If the debts consolidated include a debt arising froma consumer loan the transaction is a consolidation with respect to aconsumer loan and the amount of the finance charge is governed by theprovisions on finance charge for consumer loans (subsection (1) or (2) ofsection 16a-2-401), as appropriate.

      (3)   If a consumer owes an unpaid balance to a creditor with respect to aconsumer credit transaction arising out of a consumer credit sale, andbecomes obligated on another consumer credit transaction arising out ofanother consumer credit sale by the same seller, the parties may agree to aconsolidation resulting in a single schedule of payments either pursuant tosubsection (1) or by adding together the unpaid balances with respect tothe two sales.

      History:   L. 1973, ch. 85, § 33;L. 1993, ch. 200, § 10; Jan. 1, 1994.