At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.
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.
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.
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.