Bank Threatening Repossession? Know Your Rights Before It's Too Late.

Under the National Consumer Credit Protection Act 2009 (NCCP), a credit provider must serve a default notice before taking enforcement action on a regulated credit contract. The notice must give you at least 30 days to remedy the default — for example, by making up missed repayments. If you remedy the default within that period, the lender cannot proceed with enforcement. If you cannot remedy the default, you may lodge a hardship application within the notice period, which triggers further obligations on the lender. After the notice period expires, the lender can commence court proceedings or (in most states) exercise a contractual power of sale.

Under the NCCP, you have the right to request a hardship variation from your credit provider if you are experiencing financial hardship that is expected to be temporary and you believe you can meet a varied repayment schedule. You can request a reduced repayment amount, an extended loan term, a repayment holiday, or capitalisation of arrears. The lender must consider your application within 21 days and must not take enforcement action while the application is being assessed. If your hardship application is refused, you can lodge a complaint with AFCA. A lawyer can assist you in preparing a compelling hardship application.

When a mortgagee (your lender) takes possession of your property, they assume management and control of it and have the power to sell it to recover the outstanding loan amount. Mortgagee in possession typically follows a court order or, in some states, the exercise of an express power of sale without court involvement. The mortgagee must exercise the power of sale in good faith and take reasonable care to obtain the best price reasonably obtainable. If there is equity remaining after the sale and all costs are paid, any surplus is returned to you. If there is a shortfall, you remain personally liable for the difference.

Yes, in some circumstances it is possible to obtain an injunction from a court to halt a scheduled mortgagee sale, but it becomes progressively harder as the sale date approaches and exchange of contracts occurs. Courts require strong grounds for an injunction, such as evidence of a legal irregularity in the enforcement process, a genuine dispute about the amount owed, or a pending refinance or sale that will redeem the mortgage. Acting quickly with a lawyer — well before the sale date — gives the best prospect of successfully intervening. Once a sale contract is exchanged with a third-party purchaser, stopping the sale becomes extremely difficult.

Yes. A mortgagee owes a duty to the mortgagor to take reasonable care to obtain the best price reasonably obtainable at the time of sale. This is confirmed under Australian law including by case law and, in some states, by statute. If the property was sold significantly below market value — for example, by failing to adequately market the property, accepting a quick sale without proper advertising, or selling in poor market conditions when waiting would have been reasonable — you may have a claim in damages for the difference. A lawyer can assess the sale and advise whether the mortgagee's conduct gave rise to a breach of duty.

If your bank has not properly assessed a hardship application, has acted unfairly, or has commenced enforcement action improperly, you can make a complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent dispute resolution service that can consider complaints about credit providers and can award compensation or direct the provider to vary the contract. A complaint to AFCA can also pause enforcement action while the dispute is being assessed. AFCA must be approached after the bank has declined to resolve your complaint internally through their internal dispute resolution process.