Basic Overview of the Legal Process
You as consumers need to have a comprehensive understanding of your legal rights both inside and outside of debt review. Ensure that these legal processes are followed - if not the legal process should not continue due to a technical error in the legal system.
If you find an error or flaw in the legal system, it is your responsibility as consumers to notify the relevant parties and then follow through with action. After all, this flaw could contaminate your life for many years to come if the action is not corrected.
There is a basic flow of events that must occur which enforces the legal action taken. There can be no deviation within this process. In other words, a Judgement cannot be taken, unless a Summons has first been issued. The below course of events, must be followed in this specific order.
1. Letter of Demand - also known as a Section 129 Letter
- This letter is sent either by your credit provider or their instructed attorney.
- The big credit providers send you a letter that states clearly on the top portion of the letter, that this is a notice in terms of Section 129 (1) of the National Credit Act 34 of 2005.
- Smaller credit providers have been known so send it as a Final Demand Letter that goes on to address Notice in terms of Section 129.
- This letter must to be sent via registered mail to consumers. The problem arises when you do not open your post or pick up the registered letter from your post office.
- Regardless of whether you pick the letter up or not, the fact that the creditors have issued the Section129 stands in court if they can prove it was sent to you via registered mail, and delivered to your address.
- The letter calls for you to call the creditor to make arrangements. Do not ignore this request.
- It is always best to deal with the creditors in writing. Keep a copy of times, dates and contacts you have dealt with as this becomes a very important issue when consumers make arrangements, only for the creditors to proceed with the next legal step, a Summons.
- The letter also refers you to see a debt counsellor. This is the most mystifying portion of this letter, as if you have received this letter prior to being placed under debt review, the debt counsellor cannot help you on the account number that the letter was served on.
- Section 129 is enforced from the date the creditors or their attorneys issued the letter.
- Check the date that has been listed on the letter, to the date the letter was posted. It has been known that letters have been sent whereby the dates do not correspond. An example of this is the letter is dated 1 January 2011 but it was only sent on the 4 April 2011.
- This letter also advises, that it is the creditors intentions to take further legal action. Creditors warn consumers that should this letter be ignored, they will enforce their rights to issue a summons which could result in a sale of execution on your home. A further warning is issued, when creditors advise that they intend to supply adverse information through to the credit bureaus.
2. Summons - High Court and Magistrates Court
- As soon as you are served the Summons you must take immediate action.
- If you are not in debt review, you need to get to an attorney as quickly as possible. If you are under debt review, get the summons through to your debt counsellor as quickly as possible and ensure that you get advice within one week.
- Understand that there is a limited time frame that you must respond to in order to defend the summons.
- For a Magistrate Court Summons it is usually 10 business days. Business days excludes Saturdays, Sundays and Public Holidays.
- For a High Court Summons, it is usually between 10 - 20 business days in which a notice of intention to defend must be filed. It is highly recommended that you use an attorney in all High Court matters as the law can become complex and extremely technical.
- Consumers have the right to defend themselves, but it is not advised if you have no legal background.
- The most important factor to remember when being served with a summons is that the action being taken by your credit providers needs to be defended. If you do not defend the summons, you can be guaranteed that creditors will take a judgment against your name.
- theDCI recommends the attorneys listed on the site, all of which are experts in the field of debt review matters. See Specialised Attorneys under the debt counselling section. All these attorneys can help you defend a summons, even if you are currently not in debt review.
- It is very important to note that a Summons is always served on the consumers "chosen domicillum cltandi et executandi". In basic English, the address you gave when the credit application was granted.
- It is highly recommended that you inform all your creditors in writing of any new physical address and keep a record thereof.
- Creditors can only send legal notices out to the chosen domicillum. It is in your best interest to know when a creditor wants to enforce their rights and starts legal proceedings against you.
- Mistakes can happen whereby creditors may start legal action in error. If you do not know about the legal action, you may lose your home or spend thousands of rands in trying to correct what could have been a simple error to mend.
3. Judgments against your name
A judgement against your name, is a record of a default on payment, which has resulted in a court order being obtained by your credit provider, which has a negative impact against your name.
If you have a judgement against your name, and it has been taken legally, it is because you failed to contact the bank when they sent you a section 129 letter or you failed to defend the summons that was served on you.
If a judgment has been placed on your name in error, steps can be taken through an attorney to have the judgment rescinded /reversed.
If any legal action or judgement has been taken in error on the creditors behalf, ask your attorney to correct the matter as quickly as possible and to ask the courts for costs bared.
If judgement has been taken due to failure on your behalf to respond to the summons, there must be a valid and strong defence to get the judgement rescinded. It has become extremely difficult to do this as good faith plays a major role in the decisions of the courts; you will need a good defence proving why you should be allowed to keep the asset.
4. Court Orders - Notice of Attachment, Writ of Execution, Auction date
- By the time the Sheriff appears at your front door, you must accept the fact that he has been ordered to do so by the courts. Failure to do his work is contempt of court. Regardless of what the truth is, if a Sheriff serves a court order on you, you have to comply. You have no say in the matter.
- If it is an order to remove the vehicle, it must be taken when the Sheriff leaves your premises.
- If it is an order to attach your property, you can be guaranteed that there will be a sale in execution date that will follow promptly.
- Repossession of a vehicle or of any other asset cannot be obtained or taken away legally unless there is a court order granting the judgement against you.
- Always ask the Sheriff for a copy of the court order. This is your right.
- Never give your asset up, unless you are served with a copy of the court order to remove, or to attach your asset.
- At times, the only way to halt an auction date on the sale of a property or to stop the sale from going through after the auction has occurred, is to apply for sequestration or liquidation.
This does not mean that you will keep your assets, either way your assets must go to relieve you of the debt. But at times, if a forced sale did not do justice to the value of the asset, especially so with a property, sequestration or liquidation will always be a better option.
(With thanks and appreciation to The Debt Counselling Industry - www.theDCI.co.za)