A debt waiver is an add-on product that cancels what someone owes on a car loan if something bad happens. If a borrower cancels the debt waiver during the free-look period (a short window right after signing), they get all their money back as long as no benefits were used. After that window, if they cancel early, they may get back part of what they paid, minus a fee of up to $75, as long as no benefits were used. If the cancellation happens because the borrower stopped paying or the car was repossessed, any refund goes straight to the lender to reduce what is owed — unless the loan has already been paid off.
407.2050. — — . — 1. Debt waivers shall provide that if a borrower cancels a debt waiver within the free-look period, the borrower shall be entitled to a full refund of the amount the borrower paid, if any, so long as no s have been provided.
2. If, after the debt waiver has been in effect beyond the free-look period, the borrower cancels the debt waiver or there is an of the , the borrower may be entitled to a refund of the amount the borrower paid of the of the purchase price, if any, less a cancellation fee up to seventy-five dollars, if no benefit has been or be provided.
3. If the cancellation of a debt waiver occurs as a result of a default under the finance agreement, the of the motor vehicle associated with the finance agreement, or any other of the finance agreement, any refund due may be paid directly to the or and applied as a reduction of the amount owed under the finance agreement unless the borrower can show that the finance agreement has been paid in full.
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Source & history notes
(L. 2023 S.B. 398)
Related Missouri laws
Debt waiver disclosure requirements
RSMo 407.2045
Debt waivers exempt, when
RSMo 407.2055
Debt waiver insurance policies, requirements and coverage
RSMo 407.2040
Definitions
RSMo 407.2060
Debt waiver obligations, insuring of by retail sellers and creditors, requirements
RSMo 407.2035
Administration of agreements, use of administrator or designee
RSMo 407.2065
Legal information, not legal advice. Always confirm with the official source at revisor.mo.gov.