1. You need to reduce your payments to lenders
Under the National Credit Act which came out 2006/7, there is provision, for a new procedure called Debt Counselling. This is basically a structured way where the Debt Counsellor negotiates with the banks on your behalf to reduce your payments by perhaps 40% of so, on average, to give you a chance to pay off the debt. Sometimes you can save considerable amounts on interest payments with this arrangement.
However if the bank has already summonsed you, then you cannot use debt counselling for that debt (though you can still will other debts).
If you think Debt Counselling might be useful for you then DebtStrategies.co.za might be useful.
2. Defending against Summons
If you have received a summons by the bank you must immediately defend it or the bank may in just a few weeks get judgment against you by default.
There are two different ways the bank can proceed against you, the documents you get from the Sheriff will either say either “Summons” (for an ‘action’) or they will say “Notice of Motion” and “Founding Affidavit” (for an ‘application’). They will say on them how long you have to respond but it will either be 5 days or 10 days which because they don’t count weekends and public holidays, usually works out to a week for 5 days or two weeks for 10 days.
Within that time, you must file a notice of intention to defend for an action , or to oppose for an application. This is a very basic document.
Then you have about three weeks to file your actual defence (known as a “Plea” in actions and a “Answering Affidavit” in applications.
3. The Bank is About to Sell your House at Auction
If the bank is about to sell your house at auction, you may lose a high percentage of the value of your home. You must stop it or sell the house yourself first.
Unfortunately, we often see banks selling people’s houses for 30%, 50% or even 90% less than what they are worth. This practice is iniquitous.
If the bank has got their judgement wrongly then it is sometimes possible to get a rescission.
Otherwise, we can help you find people that can buy your house quickly. This would be at less than its value, but nothing like as low as what banks sell for.
4. The Bank has already sold your house at Auction – for nothing
There is a growing trend to sue banks when they sell your house for substantially less than it is worth.
We often see banks selling people’s houses for 30%, 50% or even 90% less than what they are worth.
Yet, some people in the Banking Law Advisor community are developing strong legal argument that it is unconstitutional to do so. Someone is even developing a PhD thesis on this matter this year.
There are individuals that are suing the banks to recover the difference. This might be a suitable strategy for you. There are some legal professionals now who are specialising in this area, so the costs are coming down as they are spread over many people. Also the lawyers that specialise in this area are often sympatric to people struggling against practices they consider wrong, so they sometimes allow people to pay the amount over a few months.
5. Another more complicated situation
Alternatively, you may be considering sequestration.
If you believe you are a victim of lender fraud, or are be being harassed by debt collectors then we can help you with details of what they are allowed to charge, what debt collectors can charge, etc. You may be the victim of reckless lending or the bank may have calculated your interest wrongly.
Have concerns about securitisation, or the extent of money supply growth or boom/bust cycles.
You may be a company that has been illegitimately liquidated or defrauded.
You may be suffering illegitimate criminal prosecution.
You may be wondering what happens if you get divorced at the same time as being in financial trouble.
You may be considering business rescue.
You may be wondering how to arrange the Memorandum of Incorporation for your company in this situation.