Definition of home repossession:
This is the phenomenon that occurs when a borrower fails to pay their outstanding amount as agreed in the terms and conditions between them and the bank. Repossession takes place to recover the outstanding money.
What is the procedure?
– The Bank communicates with the debtor to engage the outstanding payment on the monthly bond and provide alternative ways to proceed with the agreement.
– A variety of options are presented to the debtor, ranging from debt counseling to selling the property.
– Given there is no consensus on the way forward, the Bank will then transition towards foreclosing (a notice instructing you to vacate the property as you are no longer in ownership).
-A section 129 letter of demand is issued, this is a step that occurs prior to the institution of any legal proceedings. A letter which informs the debtor that they are in arrears.
-Given that there is no consensus in this regard, the bank’s legal department obtains a summons from the High Court or Magistrate’s Court.
-This is followed by the summons being delivered to the debtor by a Sheriff of the Court.
-The next step is the bank obtaining a judgment order, through which the bank will apply for the right to auction off the property.
– The revenue from the auctioned-off property is used to cover the outstanding amount of money from the credit agreement between the debtor and the bank. Given that it is not sufficient, the debtor remains liable for the outstanding amount.
Can I negotiate for my house not to be repossessed?
Yes, this requires proactively communicating your financial constraints to the Bank prior to failing to pay the monthly bond payment. This opens room for you and the bank to reach a fair and equitable payment arrangement(s).
Manzankosi Corporate Legal Consultancy is a suitable and competent Legal Consultancy when it comes to assisting you in mitigating matters of debt, credit agreements, debt counseling, and repossessions. Get in touch with us for more information at info@manzankosiclc.co.za or WhatsApp us at 067 147 2323 /081 712 1114.
