Repossession

Expect your lender to:

• Treat you, and your property, fairly and reasonably when repossessing any of the items listed in your contract in the security section.
• State in your contract that they can repossess any goods you have agreed to, in order to secure your loan (in case you can’t pay).
• Provide a Repossession Warning Notice setting out the amount you are behind in payments, listing the items they will take, but first giving you a chance to repay. You should also expect to see information about how to seek financial hardship relief, and the lender’s external dispute resolution scheme’s name and contact details.
• Not repossess anything while an application for unforeseen hardship is being considered or if you have an unresolved complaint about the repossession action itself.
• Provide a Post Repossession Notice after the items have been repossessed setting out how much you would need to pay to stop the items being sold.
• Sell the repossessed goods to attempt to recover the outstanding debt. The goods may be sold for less than the amount you owe.
• Freeze your loan account and stop charging you any further interest or fees once any of your repossessed items have been sold (even if it’s just one of many security items given). The maximum amount owing after sale can be found on your Statement of Account, which must be given to you within 7 days of the sale.

Be prepared to:

• Receive documents that include a list of specific items that you agreed can be taken if you can’t pay what you owe, and check what is being taken against that list.
• Surrender any of those things if that’s the best outcome for your circumstances. These items will be sold, and the money collected will go to repaying your loan. You will still have to pay any balance owing if the price they are sold for doesn’t cover your debt.
• Have repossession agents turn up and enter your house, including when you’re not at home if the loan contract allows for unoccupied entry.
• Continue making payments on your loan at the amount agreed with your lender.
• Have some items repossessed without warning if the lender considers they are at risk, for example the lender has a reason to believe they might be sold or destroyed.

Top tips

• If the lender sells a repossessed item, and you still owe money, your loan is frozen at that point. Although no more fees and interest can be added to your loan, you will still have to pay the remaining balance.
• The lender or their agent can only enter your house to repossess goods between 6am and 9pm (unless you consent to entry outside of those hours). They can’t enter your home on a Sunday or public holiday (unless you consent).
• If the lender has installed a disabling device in your car, you have some rights about when it can be activated and getting access to your car in an emergency if it has been activated. You can read more about disabling devices on the Community Law website, https://communitylaw.org.nz/.
• If you are in financial difficulty and are concerned about repossession, get in touch with your lender as soon as possible and work out an arrangement to pay. Don’t wait for the notices to be sent. You can also ask a Financial Mentor for help, and they can help you work with the lender or work on your behalf