Kelvin asks: I was placed under debt review and could not cope with repayments of R10 000 and therefore skipped two payments due to financial difficulties. I have been terminated by my creditors and I am really worried about what can I do.
Maya replies: The provisions of debt review are clear in that it is seen as a “final chance”, and if you do not comply, your debt review can be cancelled and you lose all protection. This means your creditors can take legal action against you, such as a judgement, and can attach your assets.
However, it does seem strange that you were given a repayment schedule that was not affordable for you — this seems counter-intuitive. Also, you need to find out if the debt review was terminated or just the credit agreement.
According to Paul Slot of debt-counselling firm Octogen, it sounds like your credit agreement was terminated and not necessarily the entire debt review. A credit provider can terminate the agreement after 60 days if no court date is in place.
Slot says where other credit providers have not terminated, that debt review can carry on. Where credit providers have terminated they could proceed with legal enforcement unless repayment terms are agreed or if a court refers the matter back to the debt review (section 85 of the National Credit Act).
Slot says you have three options:
- If it was not legally terminated you can defend this.
- You can make an arrangement to repay by contacting the credit provider and offering an amount to repay the debt. This is best done in writing.
- Do nothing, in which case credit provider will request a judgement and take legal action.
The best course of action is to find out more about your rights, whether the debt review or just a credit agreement was terminated, and whether you can negotiate with the credit provider. You can contact the National Debt Mediation Association on 0861 11 6362 or go to its website, www.ndma.org.za.
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