Boat Loans Australia :: Articles
SHARE

Share this article!

Default and Reposession

Default and Reposession

Most people would assume that a default under a loan contract means that payments haven't been made but, as you are about to learn, there are other reasons why a lender may have the right to repossession.

Default

The most likely reason that there has been a default under the contract is because a payment has not been made. Where a mortgage is held over goods (usually a car), other reasons may include:
  • the borrower fails to maintain insurance;
  • the borrower sells the goods;
  • the borrower otherwise disposes of the goods;
  • the borrower transfers the ownership to another person.

Legal proceedings

This term generally means an action that is initiated in court.

Debt Stressed?
If you're struggling to pay your debts and covering living expenses, we're here to help. Through our national panel of Debt Management specialists, we can help customers with $10k or more in debt by consolidating your existing loans, stopping Debt collectors from contacting you and re-negotiating repayments on your terms!
Although the credit provider has wide powers to begin legal action to recover a debt, in regulated contracts certain conditions must be first be satisfied:
  • the debtor (the person who owes the money under the contract) is in arrears of their payments;
  • an appropriate notice has been posted to the last known address of the debtor (or any guarantor);
  • the debtor has been given the appropriate period to pay the debt.

There are exceptions to these rules.

For instance, where the credit provider has made reasonable efforts to contact the debtor and has been unable to do so.
Remember, if this is a second or later default, the credit provider may have previously informed you that no further notice will be given.
Get legal advice if proceedings have been instituted.

Extensions

It is possible to seek an extension on the loan repayments if you are in default, but it is best to have a reasonable excuse.

Negotiation is often a good starting point.
For instance, if you were unemployed for a period of time but are now in a position to make the repayments, this might allow an extension to be provided.
Where larger sums are involved, it is important to get legal advice.

Refinancing

Do not agree to a proposal to refinance without getting professional advice from an accountant, lawyer or specialist legal centre/financial adviser.

Repossession

Repossession can take place under the Consumer Credit Code following the expiry of the appropriate notice period (or following an exception to these rules as above) where the credit provider has a mortgage under the contract (usually a car).

However, repossession cannot place if:
  • the amount still to be paid is less than 25% of the amount financed;
  • the goods are stored on private property, unless a court or tribunal has made an appropriate order or with the borrower's (or occupier of the premises) consent. Following repossession under contracts regulated by the Consumer Credit Code, the borrower must be given notice of:
  • the value of the goods;
  • the repossession expenses; and
  • the right to recover the goods by paying the debt or remedying the default.

It is still possible to negotiate a deferral of this procedure e.g. if the borrower can prove they are about to receive monies owed to them that will cover the costs.

Sale. The credit provider must get the best price possible for the goods.
On the other hand, it is possible for the original borrower to introduce a buyer to the credit provider.
If the best possible price has not been obtained (this may be difficult to prove if you did not have the goods valued prior to repossession), or the provider unreasonably refuses the person you introduced, you should seek professional advice.

Money owed after sale

If the amount obtained on the sale does not equal the amount owed under the contract, the credit provider may begin legal proceedings in a local or magistrates court to recover the balance.

Guarantors

If you are the guarantor under a contract you may be liable for the amounts owed. However, this is restricted to situations where:

  • a judgement debt has been made against the borrower i.e. a borrower who has a court judgement against them that orders them to pay a sum of money to the credit provider; or
  • the court has allowed the credit provider not to obtain a judgement against the borrower; or
  • the borrower is insolvent or cannot be found. Get legal advice if you are the guarantor in this situation.

Unjust contracts

Under the Consumer Credit Code, any of the parties to the regulated credit contract can ask to get out of a contract if it was unjust or harsh at the time it was entered into. Whether the contract was unjust will depend on the circumstances. It may be because of:

  • harsh terms in the contract;
  • the way the negotiations were conducted to induce the borrower to enter into the contract;
  • a rate of interest that is excessive in the situation. It is important to get legal advice of you believe the contract is unjust because the issue must be adjudicated by a court or tribunal. Under the Consumer Credit Code the court may look into (amongst other things):
  • the inequality of the bargaining situation;
  • public interest;
  • whether independent professional advice was obtained prior to signing;
  • whether the borrower understood the terms of the contract;
  • whether there were unfair tactics or unfair pressure applied to the borrower.

Published:Sunday, 1st Aug 2021
Author: Paige Estritori

Share this article:

Insuring your most valuable asset
While many people would consider their home or their car to be their most valuable asset, it's your ability to earn an income that is most important in shaping your financial future. Statistically, two thirds of working Australians will suffer an injury or illness that will sideline them for 90 days or more. The majority of these people would not be able to pay their mortgage or meet car finance and other loan commitments without adequate income insurance.
Need a Bigger Boat?
We provide direct access to the best Boat Loan rates and options in Australia through our national panel of specialist marine finance brokers. Simply complete our quick & easy Boat Loan quote enquiry form to see if you qualify - and to gain access to the best Boat Loan offers from our broker panel.

Boat Loans Articles

How to Avoid Capsizing Your Budget When Comparing Boat Loans How to Avoid Capsizing Your Budget When Comparing Boat Loans
The excitement of buying a boat and the role of right financing: The dream of sailing on the open seas or cruising through tranquil waterways can be incredibly enticing. The prospect of owning a boat opens up a world of adventure, relaxation, and luxury. However, much like navigating through uncharted waters, purchasing a vessel requires sound financial planning. Choosing the right boat loan is crucial in making this dream a reality without causing a financial shipwreck. - read more
Mistakes to Avoid When Applying for Boat Financing in Australia Mistakes to Avoid When Applying for Boat Financing in Australia
When it comes to purchasing a boat, financing plays a vital role for many individuals in Australia. However, applying for boat financing can be a complex process, and making mistakes along the way can lead to significant financial consequences and missed opportunities. - read more
Escape the Loan Sharks: Avoiding Hidden Fees When Shopping for Boat Loans Escape the Loan Sharks: Avoiding Hidden Fees When Shopping for Boat Loans
Welcome to the world of nautical adventure, where the allure of the sea beckons many Australians to consider the freedom and enjoyment that comes with owning a boat. The image of setting sail on the azure waters is not just a dream; for some, it's a lifestyle choice that embodies exploration and relaxation. - read more
Setting Your Course: Fixed and Variable Rate Boat Loans Explored Setting Your Course: Fixed and Variable Rate Boat Loans Explored
The allure of the open waters is undeniable, and for many Australians, the dream of owning a boat is akin to the ultimate freedom. Whether it's for leisurely sails along the coast, fishing adventures, or simply the joy of the aquatic lifestyle, boats represent an escape from the everyday grind. However, the pursuit of this dream often comes with a significant financial consideration: boat loans. - read more
Expert Advice: What Lenders Look for When Approving Boat Financing Applications in Australia Expert Advice: What Lenders Look for When Approving Boat Financing Applications in Australia
When it comes to buying a boat in Australia, many enthusiasts turn to financing options to help make their dream a reality. Boat financing involves obtaining a loan from a lender to cover the purchase of your desired vessel. Whether you are a seasoned sailor or a first-time boat buyer, knowing what lenders look for during the boat financing application process can greatly increase your chances of approval. - read more
How to Improve Creditworthiness and Increase Chances of Boat Financing Approval How to Improve Creditworthiness and Increase Chances of Boat Financing Approval
Are you dreaming of purchasing your dream boat but worried about getting approved for financing? Ensuring you have a good creditworthiness is essential when it comes to obtaining boat financing. In this blog post, we will explore the importance of creditworthiness in boat financing and provide valuable tips on how you can improve your creditworthiness to increase your chances of getting approved for boat financing. - read more

Finance News

Australia Gears Up for Comprehensive Financial System Resilience Assessment in 2025 Australia Gears Up for Comprehensive Financial System Resilience Assessment in 2025
27 Mar 2024: .Paige Estritori

The Australian Prudential Regulation Authority (APRA) is positioning itself to inaugurate a widescale diagnostic of the nation's financial heartbeat in the year 2025. This financial health check aims to meticulously analyze the repercussions of unanticipated events on the country's financial stability beyond merely scrutinizing the banking sector. - read more
Climbing Mortgage Arrears Signal Heightened Financial Strain Climbing Mortgage Arrears Signal Heightened Financial Strain
26 Mar 2024: .Paige Estritori

Australian households are navigating a more complex financial landscape as mortgage arrears have climbed to a peak not seen since the outset of the COVID-19 pandemic, according to a new report from Fitch Ratings. The Fitch's Dinkum RMBS index has indicated that, as of the last quarter of 2023, households are falling behind on mortgage payments more frequently, sparking concerns about financial resiliency amid ever-tightening economic conditions. - read more
New Investment Approach for Australian New Homebuyers New Investment Approach for Australian New Homebuyers
25 Mar 2024: .Paige Estritori

Recent statistics have highlighted a notable shift in the strategies Australian first-time homebuyers are using to infiltrate the challenging property market. Analysis of 2023's purchasing trends indicates an emerging investor mentality among new buyers. - read more
Rentvesting Trend: First-Time Buyers on the Property Ladder. Rentvesting Trend: First-Time Buyers on the Property Ladder.
24 Mar 2024: .Paige Estritori

New insights from financial data show an intriguing pattern among Australian first home buyers in the recent year, with investment-savvy superstars choosing to become landlords right from the start. A striking one in five opted to dive into the property market, not for immediate residence but investment potential in 2023, indicating a significant shift in home ownership approaches. - read more
Australia Braces for Economic Shift as Rate Cuts Loom Amidst New Challenges Australia Braces for Economic Shift as Rate Cuts Loom Amidst New Challenges
21 Mar 2024: .Paige Estritori

Rising tensions within various sectors of Australia's economy signal a possible series of interest rate reductions by the Reserve Bank of Australia (RBA). Significant indicators, including increased unemployment rates, forecast a shift in monetary policies possibly leading to a period of lesser rates as experts observe a pre-emptive response to economic stagnation under the current administration. - read more
Steady Rates Persist as RBA Eyes Inflation Moderation Steady Rates Persist as RBA Eyes Inflation Moderation
20 Mar 2024: .Paige Estritori

In a recent monetary policy review, the Reserve Bank of Australia (RBA) has upheld the current cash rate at 4.35%, indicating a possible plateau in monetary tightening. This update aligns with widespread market analyses and fuels conversations about potential rate reductions in the coming year. - read more


Knowledgebase
Personal Loan:
A Personal Loan is a means of obtaining finance from a financial institution or financial product provider and the lending criteria usually depends on criteria such as personal income and expenses, assets and liabilities, employment status and previo


Quick Links: | Boat Loan Rates | Boat Loan Brokers | Boat Loan Calculators | Boat Loan Quote