Unable to pay your bond instalments
Not able to pay your bond instalments. Hammond Pole Attorneys share with you what you need to know.
In this article, Hammond Pole Attorney, Jacolene Jansen Van Vuuren explains everything you need to know if you are not able to pay your bond instalments.
The banks being the credit providers have the right to institute legal action to repossess your home and have the same sold in order to recover what is due and owing to them in terms of the agreement.
The legal process starts with 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 will also inform you that in terms of Section 129(3) of the National Credit Act, you may reinstate a credit agreement where you have fallen into arrears but only if the bank has not cancelled the agreement, by paying to the bank all amounts that are overdue, together with the bank’s permitted default charges and reasonable taxed or agreed costs of enforcing the agreement up to the time of reinstatement.
Section 129(4)(a)(i) of the National Credit Act further states that the credit agreement may not be reinstated after a sale of any property pursuant to an attachment order.
In the event the debt is not settled or a payment arrangement not entered into with the bank, a summons is issued and served in terms of which the bank will seek monetary judgment as well as an order for execution.
A reserve price is set by a court in all matters where execution is granted against immovable property, which is the primary residence of a debtor, where the facts disclosed justify such an order.
The bond creditor, being the bank, will also include all relevant documentation in its application to the court when applying for an order for execution, which will support the request for a certain reserve price. Similarly, you as the debtor has a duty to place all facts before the court. The reserve price will therefore be set on a case-by-case basis at the discretion of the court.
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.
Once judgment is granted, a writ of execution will be served, your property will be attached and sold at a sale of execution. Should the proceeds from the sale in execution not be enough to settle the outstanding balance on your bond, you will be liable for the shortfall.
To conclude, it is crucial that you make the necessary arrangements and/or payments to avoid legal action. Examine your budget carefully and cut back on your debts in order to free up enough money to keep your payments on track or ask the bank to extend your mortgage payback period to 30 years. Another option is to sell the property before you fall into arrears.
For expert legal advice on bond instalment related cases, contact one of our knowledgeable attorneys at Hammond Pole, today: (011) 874 1800 or email: info@hammondpole.co.za