Secured loans and second mortgages

Secured loans and second mortgages may be regulated by the Consumer Credit Act 1974. The procedures for enforcing the debt by taking possession differ from possession proceedings for first mortgages and secured loans not regulated by the Act.

This can be a complex area of law and advisers who are uncertain should refer to a solicitor or specialist money adviser.

Consumer Credit Act

This page explains how to work out whether or not a loan is regulated by the Consumer Credit Act 1974. 

Notice of sums in arrears

If a borrower falls behind with the payments to a secured loan or second mortgage, the lender should first send them a notice of sums in arrears before sending a default notice. 

Default notice

If a borrower has breached her/his credit agreement, the lender must serve a default notice before s/he can take possession proceedings. 

Time orders

The Consumer Credit Act 1974 regulates the serving of time orders. 

This content applies to Scotland

Last updated: 7 February 2020