Normally if a borrower fails to make a loan repayment on time, a lender can take prompt and immediate action to recover amounts owing, such as:

  • Demanding the full amount of the loan immediately (not just the late payment), i.e. accelerating the loan.

  • Taking possession of any secured goods and property.

  • Issuing legal proceedings to recover the outstanding debt.

 

Division Two of Part Five of the Code modifies the common law rights of the lender and sets out protocols for enforcement proceedings under a credit contract.