- possession of the property, and/or
- payment of the whole amount owing under the credit contract
In July 2008, Smith entered into a loan agreement with Lovely Loans Pty Ltd (Lovely Loans) for an agreed amount of $200,000.00 secured over his residential home. In August 2009, Smith was made redundant from his employment. Lovely Loans granted a hardship variation allowing Smith to cease repayments for the months of August, September and November of 2009.
In December 2009, Smith was still unemployed. Subsequently, he missed the
December 2009 and January 2010 payment. In February 2010 he was issued with a default notice prescribing 30 days to remedy the default and make the normal repayments. Smith did not remedy the default within the 30 days.
On 13 March 2010, Lovely Loans started legal proceedings and subsequently a
judgment was entered, allowing Lovely Loans Pty Ltd to take possession of the property. However, prior to Lovely Loans enforcing the judgment, Smith won
$20,000.00 playing lotto and used the money to pay off the arrears owing. Smith gained employment and continued to make the repayments to the loan. He thought he had no worries because his loan was up to date. Lovely Loans was yet to enforce the judgment. However, in May 2016 Smith missed another repayment. A few days later he received a notice requesting he vacate the property. Smith owed Lovely Loans $180,000.00
Q: What is his legal position?
Paying off the arrears owing on the loan does not mean the judgment has no effect. It simply lessens the amount owing to the bank. The judgment can still be enforced because the court ordered that he pay the full amount of the loan, not just the arrears.
It is open to Smith’s to pay out the contract (refinance) or to try and negotiate with Lovely Loans to remain in the property and continue making repayments or to sell the property himself. However, if Lovely Loans does not want to negotiate then his options are limited at this late stage.