Creation of charge in favour of credit union

(1) A person to whom money has been lent by a credit union or who is otherwise indebted to the credit union may be required to create a charge in favour of the credit union in such form as may be prescribed. (2) A charge shall, so long as it continues in force, confer or impose on the credit union the following rights and obligations, Credit Unions Act 39 (a) the right to take possession of any property subject to the charge, upon the happening of any event specified in the charge as being an event authorizing the chargee to seize the (b) to sell the property referred to in paragraph (a), after an interval of five clear days or such less time as may be specified in the charge from the date of taking possession, either by auction or, if the charge so provides, by private treaty, and either for a lump sum or payment by instalments; (c) to apply the proceeds of sale in or towards discharge of the debt secured by the charge and the costs of seizure and sale and to pay any surplus of such proceeds to the member whose property was sold. (3) A charge shall, so long as it continues in force, impose on the member the obligation to pay to the credit union, towards the discharge of the indebtedness, the proceeds of sale of any property comprised in the charge or any money received under any policy of insurance or by way of compensation in respect of any such property, except insofar as the charge otherwise allows. (4) For the avoidance of doubt, it is hereby declared that a charge under this section is not a bill of sale.