Why repossession requires a recovery notice first
When a secured loan defaults, the institution cannot simply take the collateral. Repossession in Ustawi is hard-gated on a served recovery notice: the notice must be served and its notice period must elapse before the system will let repossession proceed. This is enforced in software, not left to a case worker's memory.
The gate, in sequence
Detecting a default does not unlock repossession. The recovery notice sits between the two, and each step must complete in order before the next becomes available.
- 1Default detectedThe loan reaches the point where recovery against the collateral is being considered.
- 2Recovery notice drafted and servedThe statutory notice is prepared and served on the borrower — the formal warning the law requires before enforcement.
- 3Notice period elapsesThe borrower's window to respond or remedy runs its full course; repossession stays locked until it does.
- 4Repossession unlockedOnly once a valid notice has been served and its period has passed does the system allow repossession to proceed.
Why the gate is enforced in software
Acting on collateral before serving the required notice, or before its period expires, is not just a process slip — it can invalidate the recovery and expose the institution. By making the served notice a hard precondition rather than a checklist item, the system ensures repossession cannot move faster than the law allows, regardless of who is handling the case.
This article covers why the gate exists on the collateral side. For what the notice must contain and its timing, see the recovery notices guidance in Compliance.