The Law Handbook 2024

Chapter 5.8: Mortgages, consumer leases and other finance products 443 • a court allows the credit provider to repossess (s 88(5) NCC) ( Capital Options (Aust) Pty Ltd v Batchelor [2013] QCAT 493 at 22 (18 September 2013)). Once the debtor receives the section 88 default notice (or even before), they will have at least one month to consider options such as refinancing, a variation to the contract, some other negotiated resolution or a complaint to a dispute resolution scheme. If the debtor applied for financial hardship or a postponement of enforcement proceedings, they may have even more time to consider their options as the notice periods required in relation to applications for hardship (s 89A) and postponement of enforcement proceeding (s 94) may end before, at the same time or after the end of the period for remedying the default specified in the section 88 default notice. The NCC contains similar provisions for enforcement in relation to consumer leases (see ‘Consumer leases’, below). Direct debit default notice Since 1 July 2010, a credit provider has been required to issue the debtor with a special notice within 14 days of the first occasion of default under a direct debit payment system (s 87(1)–(2) NCC). The notice must be in the form prescribed by the NCCP Regulations (‘Form 11: Direct debit default notice’) (s 87(3) NCC; reg 85 NCCP Regulations). The notice does not replace or modify any other preconditions for enforcement action under the NCC (s 87(5) NCC). Repossession When can the credit provider repossess? The credit provider may be entitled to repossess mortgaged goods if the period specified in the default notice has expired and the default has not been remedied. Restrictions on the right to repossess In most cases, the amount owing must be more than 25 per cent of the amount of credit provided under the contract, or $10000 (whichever is less), unless a court otherwise consents (s 91 NCC). The credit provider or its agent cannot enter onto residential premises to repossess mortgaged goods unless a court has authorised entry, or the occupier of the premises has, after being informed in writing about the provisions of section 99 of the NCC (which deals with entry to residential property to take possession of goods), consented in writing to the entry. The NCCP Regulations set out the form of the written consent (‘Form 13: Consent to enter premises’) and permitted hours of contact. The credit provider can seek an order from a court to enter onto residential premises and take possession of mortgaged goods (s 100 NCC), or an order that the goods be delivered to the credit provider at a specified time and place (s 101 NCC). What can the debtor do to avoid repossession? To avoid repossession, a debtor can: • bring the account up to date; • seek the credit provider’s permission to sell the goods privately (this may allow for the goods to be sold at a better price than would be obtained at auction); • seek a postponement of enforcement proceedings (s 94 NCC); • seek a hardship variation; or • pay out the net balance due under the contract. What happens after repossession? Within 14 days after repossession the credit provider must give the debtor, or post to the debtor’s last known address, a written notice setting out the estimated value of the goods, the enforcement expenses incurred up to the date of the repossession and the rate (if any) at which they will continue to accrue, and a statement of rights and obligations as required under the NCCP Regulations (‘Form 14: Notice after taking possession of mortgaged goods’) (s 102 NCC). The credit provider cannot sell the goods until 21 days after this notice has been given. Section 103 of the NCC allows the debtor to nominate in writing a purchaser for the goods within the 21-day period of the Form 14 notice. The purchaser must offer at least the estimated value of the goods. During this period, the debtor may also explore other options, including seeking a hardship variation (see ‘Financial hardship’, above). The credit provider must offer to sell the goods to the nominated purchaser for the estimated value of the goods or, if there is a written offer to buy the