(a) When reinstatement may occur.--If a motor vehicle subject to an installment sale contract has been repossessed by legal process or otherwise because of default or other breach of contract, the holder may reinstate the contract and return the motor vehicle to the buyer if the buyer:
(1) pays all past-due installments; or
(2) makes mutually satisfactory arrangements with the holder regarding the following:
(i) Accrued late charges.
(ii) Costs of suit under the contract and authorized by this chapter in repossession by legal process.
(iii) The costs of retaking, repairing and storing under section 6256 (relating to buyer's liability for costs), if default at the time of repossession exceeds 15 days.
(b) Refinancing.--If an installment sale contract for a motor vehicle is reinstated after repossession, the holder may contemporaneously or subsequently enter into a contract with the buyer for refinancing the obligation as provided in this chapter.