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I have received a default notice – what next?

I have received a default notice – what next?

If you get a default notice and can pay the arrears and continue to pay your normal repayment within the time given (at least 30 days) then your loan returns to normal and the bank will not take any further action.

If you don’t pay the arrears your bank can commence enforcement proceedings (action to recover money due), including:

  • Repossession of goods - take possession of, sell, appoint a receiver for, or foreclose an asset used as security for your loan, including for example, your car or home
  • Commence court proceedings
  • Accelerate the debt so that you need to repay the whole debt not just the arrears.

That is why it is really important for you to contact your bank immediately if you:

  1. Think you might not be able to meet your repayments in the future (even though you are currently able to);
  2. Have missed a repayment or repayments; or
  3. Are in default and have received a default notice from your bank.

If you are, or think you may be, in financial hardship speak to the specialist hardship team at your bank before the notice period (at least 30 days) expires. A bank may agree to a hardship arrangement but they can’t help you with your financial situation if they don’t know you are in financial hardship or feeling under pressure.

Even if you don’t think you will be able to pay the arrears call your bank to discuss options available – it is much better than ignoring the default notice and legal action being taken!

Remember – Your bank may be able to help you by:

  • Allowing you to make a late payment;
  • Deferring payments for a period of time (and extending the loan of the term)
  • Reducing the amount of each repayment (and extending the loan of the term); or
  • Some other relief.