Glossary
Default notice
A default notice is a formal notice from a lender stating that the borrower is in default and what must be done to remedy it. Depending on the loan and state law, a notice period must usually pass before the lender can enforce.
An example
After several missed payments, a borrower receives a default notice giving a date by which the arrears must be paid. If they are not, the lender may take enforcement action under the mortgage.
Why it matters
A default notice is time-critical. Borrowers should read it carefully, contact the lender, and seek legal advice or financial counselling straight away.
Points to check
If you receive a default notice, read it carefully and note the remedy period and what you must do. Contact the lender promptly and keep a record of every conversation. For regulated loans you may be able to ask for a hardship variation, and AFCA may be able to help if you are a member firm's customer. Get legal or financial counselling advice early, as options narrow once enforcement begins.