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Loan Recovery Letter

Loan Recovery Letter Template for Australia

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Key Requirements PROMPT example:

Loan Recovery Letter

"I need a Loan Recovery Letter for a defaulted personal loan of AUD 25,000 where the borrower has missed three consecutive monthly payments, with the last payment due on March 15, 2025; the letter should emphasize our willingness to discuss payment arrangements while maintaining a firm stance on recovery."

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Document background
The Loan Recovery Letter is a critical document in Australian debt collection practices, typically issued when a borrower has defaulted on loan payments and standard reminder notices have been unsuccessful. This document must comply with the National Consumer Credit Protection Act 2009, the Australian Consumer Law, and relevant state-specific legislation. It serves as a formal demand for payment and often represents the final step before legal action is initiated. The letter includes specific details about the outstanding debt, payment requirements, and consequences of non-payment, while adhering to strict regulatory requirements regarding tone, content, and format. It's essential for maintaining a clear record of debt collection efforts and can be crucial evidence if legal proceedings become necessary.
Suggested Sections

1. Recipient Details: Full name and address of the debtor

2. Loan Reference Information: Loan account number, original loan agreement date, and other relevant reference numbers

3. Outstanding Debt Details: Clear breakdown of the principal amount, interest, fees, and total amount owing

4. Payment History: Brief summary of payment history and default status

5. Formal Demand: Clear statement of the amount demanded and deadline for payment

6. Payment Instructions: Details of how payment should be made, including acceptable payment methods and account details

7. Consequences of Non-Payment: Clear explanation of what will happen if payment is not received by the deadline

8. Contact Information: Details of who to contact to discuss the debt or payment arrangements

Optional Sections

1. Previous Communications Reference: Reference to prior correspondence or attempts to collect the debt, used when there has been previous communication

2. Hardship Provisions: Information about hardship provisions and how to apply, included when there are indicators of financial hardship

3. Settlement Offer: Details of any settlement offer or discount for prompt payment, included when authorized to make such offers

4. External Dispute Resolution: Information about external dispute resolution schemes, included when required by regulations or best practice

5. Authorization Details: Details of the authority under which the debt is being collected, included when the collector is not the original creditor

Suggested Schedules

1. Statement of Account: Detailed statement showing all transactions, interest charges, and fees

2. Copy of Original Loan Agreement: Copy or summary of the relevant terms from the original loan agreement

3. Payment History Schedule: Detailed schedule of all payments made and missed payments

4. Interest Calculation Schedule: Breakdown of how interest has been calculated on the outstanding amount

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking & Financial Services

Credit Unions

Consumer Finance

Commercial Lending

Mortgage Services

Debt Collection Services

Legal Services

Financial Technology

Relevant Teams

Legal

Collections

Credit Management

Risk & Compliance

Customer Service

Operations

Account Management

Debt Recovery

Documentation

Finance

Relevant Roles

Credit Manager

Collections Officer

Loan Recovery Specialist

Legal Counsel

Compliance Officer

Account Manager

Debt Recovery Agent

Risk Manager

Financial Services Manager

Credit Assessment Officer

Collections Team Leader

Legal Operations Manager

Industries
National Consumer Credit Protection Act 2009 (Cth): Primary legislation governing consumer credit in Australia, including requirements for credit providers and debt collectors, licensing requirements, and responsible lending obligations
Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010): Provides protection against misleading or deceptive conduct, harassment, and coercion in debt collection practices
Privacy Act 1988 (Cth): Regulates how personal information can be collected, used, and disclosed in debt collection activities, including credit reporting
ASIC Debt Collection Guideline: for collectors and creditors: Joint ASIC/ACCC regulatory guidance on debt collection practices, including appropriate contact methods and conduct
Banking Code of Practice: Industry code that sets standards of practice and service in the Australian banking industry, including dealing with debt recovery
Limitation Act (State-specific): Sets time limits for taking legal action to recover debts, varying by state/territory
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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