Hammond Pole advises on non-payment of vehicle instalments
Ever think of what will happen if you cannot pay your vehicle instalments due to financial difficulties?
We all know that life happens and the next thing you know, you are unemployed and unable to pay your debt. Hammond Pole attorney, Jacolene Jansen Van Vuuren advises on the non-payment of vehicle instalments.
The first option is to approach the bank to restructure your deal or make a payment arrangement. This will mean reduced instalments and a longer term.
Second option is to sell the vehicle yourself however you will need to inform the bank as they need to approve the offer to purchase, possibly refinance the vehicle and register the same in the purchaser’s name. Remember the bank is the owner of the vehicle.
Third option is to voluntarily surrender the vehicle back to the bank in which case they will value and sell the vehicle and you will be liable for the shortfall.
Should you decide not to choose any of the above options, the banks are entitled to, due to the agreement concluded between you and them, institute legal action against you to recover the outstanding balance on the vehicle account or repossess the vehicle and hold you liable for any shortfall.
The legal process includes the sending of a Section 129 notice in terms of the National Credit Act 34 of 2005 and thereafter service of a summons. The Section 129 notice gives you notice of your default, the arrears on the account and demands that the debt be paid or settled to avoid further legal action.
The notice also gives you the option to refer the debt under the agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the view of resolving any dispute under the agreement or to agree on a payment plan to bring the arrears under the agreement up to date.
In the event the debt is not settled or a payment arrangement not entered into with the bank, a summons is issued. The summons does not have to be served on you personally but can be served at your domicilium address meaning the address nominated by you in the agreement where legal notices may be sent.
If you fail to respond to the summons by filing a notice of intention to defend or appear at the court proceedings, judgment will be applied for and granted by default. The judgment is then recorded on the system of Credit Bureaus which will decrease your credit rating as you will be considered as a high risk for any future lenders or creditors.
Credit Bureaus will not remove a judgement unless it has been rescinded in either the High Court or Magistrate Court through a rescission application where one needs to prove that judgment was granted in error and/or that you were not in wilful default of the account. This could be a long and costly process.
“It is therefore of utmost importance that you do not take any judgements on your credit report lightly.”
To summarise, should you ever experience financial difficulties, and should you have the option of making any payments, go see the bank in order to avoid legal action being instituted.
If you however require legal advice or assistance in the instance of a summons, don’t hesitate to contact Hommond Pole Attorneys on: (011) 874 1800 or email: firstname.lastname@example.org