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We are all well aware of the fact that today’s economy is weak, prospects of living circumstances improving in the near future are negligible, and as things are; most people are not able to make ends meet at the end of the month.
The above could be said for the majority of the country, so its no surprise that consumers are up to their ears with an accumulation of accounts in order to make it through the month, accounts such as credit cards, grocery store accounts, clothing store accounts, loan accounts as well as your normal bills etc. For some, living this way is the only way to live, but there are two sides to this coin. For the people needing the accounts, there is an institution with the means to provide the credit or accounts to the consumer.
With the dark and grim picture portrayed above with regards to your average consumer’s financial prospects which ultimately lead to the necessity of obtaining such a loan or account, any reasonable person can expect that somewhere down the line, a consumer is going to fall short. Now you are in a position where the consumer has received everything they want or need but you have been left empty handed. What do you do?
Now let us throw a proverbial spanner in the works, there is talk of the consumer approaching debt review. What does this mean for you as the Creditor? Is your claim now rendered dead in the water or do you have your own remedies available to you to receive, or at least ensure that you will receive payment in accordance with your initial agreement?
There is a lot more to it than just being that creditor that threatens to sue everyone that owes them money. There is this unfounded belief that if you’re owed money you can just go to court, state your case and just like that you receive a transfer of the monies owed. The implementation of the National Credit Act wasn’t only brought in to regulate the issuing of credit, and who may or may not provide credit. It also regulates the way in which your debts are to be collected.
In order to begin proceedings against someone that owes you money, you need to make them aware that they are in default. This is done by way of a letter of demand, however it is essential that you are aware of how the letter is to be structured and correctly puts the debtor on terms. For example whether it requires a Letter of Demand in terms of Section 129 of the National Credit Act, Section 29 of the Small Claims Court Act. Only after this has been done, and the necessary time periods have lapsed can you then issue summons against the debtor and proceed to sue them.
Although you strongly believe that you have a claim, the debtor owes you money and out of principle you should be paid; it cannot be expressed how important it is to expect and properly prepare for them to defend themselves against your claim.
The briefly described scenario above is the easy way. That is if everything goes smoothly, however let’s bring that proverbial spanner of debt review out of the toolbox and throw it into the works. What do you do now? The absolute best thing that you can do, be fully aware and up to date with each and every account you have out there. Although there is this expectation and understanding that financials are on this rollercoaster of a downward spiral, surprisingly there are less and less agreements that are actually being covered by debt review. The reason for this is even more surprisingly simple, creditors are initiating legal processes from the moment the debtor defaults. Debt review does not facilitate credit agreements to which legal proceedings have already been instituted, and a letter of demand constitutes a first step. These credit agreements are then excluded from debt review proceedings, action may then be taken against these agreements without being forced to re-structure payments and delay your right to payment.
Now once again that could be regarded as a simple way, but now what do you do if the debtor is already under debt review and you want payment? Do you feel like you’re stuck in a corner with no option but to settle on the payment schedule provided to you? How would you feel if you knew that there was a possibility of debt review proceedings actually being cancelled in whole?
The most common ground upon which debt review is cancelled is when the debtor fails to pay the monthly debt review payments. This has a snowball effect on the payment of the debtors creditors and is a ground for the cancellation of the debt review. Other grounds include non-receipt of payment in accordance with the payment plan, in negotiating payment options the amount negotiated is not accepted, or if no counteroffer is accommodated. These are some of the grounds on which you as a creditor may have debt review cancelled.
Another ground that one could rely on would be if you could possibly prove that some of the other creditors to whom the debtor is indebted to failed to do their due diligence research on the financial means of the debtor. If it were to be found that had such research been done, the debtor would not have been eligible for the credit, it would constitute reckless credit. This would, in turn, nullify the credit agreement between the debtor and the credit provider. Thus, possibly showing that the debtor is lawfully not in fact over-indebted which should then cause the debt review proceedings to either fail or be rejected.
Being owed money is a frustrating position to be in, and the process of collecting payment can become long and complicated. You as a creditor are however not necessarily in a position to feel forced to write-off the debts or consider them as a loss. Contact someone who understands the process and is able to assist you in getting your money back. For all you know, you may find your own proverbial spanner to assist you.