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What Is a Notice of Postponement?

Sunday, July 30, 2017 - Posted by Michael McCulloch

Last month in our blog we looked at Recording Payment Defaults with a Credit Reporting Body ("CRB").

This month we are going to take a look at a Notice that isn't regularly used but can be a very effective debt collection tool where an account, under the National Credit Protection Act 2009 (Cth), is continually in arrears and the customer proposes a repayment arrangement.

s95 EFFECT OF NEGOTIATION POSTPONEMENT

(1)  A Default Notice under Section 88 or a demand for payment under Section 90 is taken, for the purposes of this Code, not to have been given or made if a postponement is negotiated with the Credit Provider and the Debtor, Mortgagor or Guarantor complies with the conditions of postponement.
(2)  It is a condition of any postponement negotiated with a Credit Provider after the Credit Provider has taken possession of property subject to a mortgage that the Mortgagor pay the reasonable costs of the Credit Provider in taking possession of the property.
(3)  A Credit Provider must give written notice of the conditions of a postponement referred to in subsection (1) not later than 30 days after Agreement is reached on the postponement. The notice must set out the consequences under subsection (6) if the conditions of the postponement are not complied with.
(4)  Subsection (3) is an offence of strict liability.
(5)  A Credit Provider that is required to give notice under Section 71 in relation to a postponement is not required to comply with subsection (3).
(6)  If any of the conditions of a postponement are not complied with, a Credit Provider is not required to give a further Default Notice under this Code to the Debtor, Mortgagor or Guarantor with whom the postponement was negotiated before proceeding with enforcement proceedings.


In reviewing this particular section of the Code the customer may propose to postpone action by entering into a repayment arrangement (s94 NCC). The application, which may be verbally or in writing, must be proposed by the customer prior to the Default Notice expiring.

As a Credit Provider you may accept a proposal to postpone enforcement proceedings and confirm this with the issue of a Notice of Postponement under s95 of the NCC. For compliance purposes the s95 Notice must outline what is required of the customer, usually a payment schedule indicating the amounts due to be paid and when but can also be non-monetary (providing evidence of registration, insurance, etc for secured goods) and the consequences of non-compliance if the s95 Notice is not complied with as stipulated in subsection (3).

It should be noted that the issue of the s95 does not stop enforcement action against other parties to the Contract. In other words each party to the Contract whether they are a Debtor, Mortgagor or Guarantor must negotiate their own postponement of proceedings.

If you would like to know more or if you would like a Notice of Postponement issued please contact us to discuss your requirements.

IMPORTANT

This article does not constitute legal advice and should not be used as such. You should obtain your own independent legal advice before acting or relying on the content of this article.


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