National Consumer Credit Protection Act 2009

SCHEDULE 1 - NATIONAL CREDIT CODE  

Note:

See section 3 of the National Credit Act.

PART 3 - RELATED MORTGAGES AND GUARANTEES  

Division 1 - Mortgages  

50   Prohibited securities  

50(1)    
A mortgage cannot be created over employees ' remuneration or employment benefits or benefits under a superannuation scheme unless the regulations permit it to do so.

50(2)    
A mortgage cannot be created over goods that are essential household property unless:


(a) the mortgagee supplied the goods to the mortgagor as part of a business carried on by the mortgagee of supplying goods and the mortgagor has not, as a previous owner of the goods, sold them to the mortgagee for the purposes of the supply; or


(b) the mortgagee is a linked credit provider of the person who supplied the goods to the mortgagor.

50(3)    
For the purposes of subsection (2), essential household property includes goods of a type prescribed under the regulations.

50(4)    
A type of goods may be prescribed under subsection (3) only if the type is similar to a type of household property mentioned in regulations made under subparagraph 116(2)(b)(i) of the Bankruptcy Act 1966 .

50(5)    
A mortgage cannot be created over goods that are property used by the mortgagor in earning income by personal exertion if the goods do not have a total value greater than the relevant limit.

50(6)    
An obligation under a credit contract cannot be secured by a cheque, or bill of exchange or promissory note, endorsed or issued by the debtor or guarantor.

50(7)    
A mortgage or security is void to the extent that it contravenes this section.

50(8)    


In this section:

antique item
means an item of household property the market value of which is substantially attributable to its age or historical significance.

essential household property
means household property as prescribed under regulations made under subparagraph 116(2)(b)(i) of the Bankruptcy Act 1966 .

goods
does not include antique items.

relevant limit
, in relation to goods, means the limit prescribed from time to time under regulations made under the Bankruptcy Act 1966 for the purposes of subparagraph 116(2)(c)(i) of that Act for goods of that type.





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