Fin24

Court strikes blow for indebted

2011-02-02 14:58

Johannesburg – For many indebted South Africans, who have had their cars and houses seized by banks, a landmark high court ruling has come too late.
 
The court has dealt credit providers a stunning blow this week, ruling that they could not terminate a debt review process once a debt counsellor referred it to a magistrate’s court.

If a registered debt counsellor determines that you are over-indebted, your creditors cannot take any action against you while a new repayment plan is being worked out.

The counsellor has to put together such a plan (usually instalments are reduced and the payment time extended) and obtain approval from your creditors.

If creditors do not agree, the counsellor will ask the magistrate’s court to approve the plan. 

The National Credit Act states that the debt counsellor should refer your debt review application to the magistrate's court within 60 business days. However, due to workload pressures on these courts, debt review matters may take months to be heard or finalised by the courts.

Some financial institutions then started to terminate debt reviews before the magistrate’s court had ruled on a repayment plan.

They would then apply to the high court to obtain judgment against consumers and start to seize assets.
 
According to recent research by the Debt Counsellors’ Association of South Africa, thousands of debt reviews have been terminated in this way.
 
“The banks have, until now, been acting with seeming impunity," says Alan Manshon, a registered debt counsellor with debt advisory and financial education group The Money Clinic. “The prevalence of these terminations is incredibly high.”

Banks were opposing the debt review court applications and then issuing termination notices before taking action in the high court. 

“In essence, they were ensuring that it was financially impossible for the consumer to defend their action.”

But this looks set to change.

The case before the high court involved Wesbank, which claimed it was entitled to terminate the debt review process of a customer called Deon Papier because 60 days had lapsed from the day he approached a debt counsellor to restructure his debt. 

This was despite the debt counsellor having lodged an application for debt review before a magistrate’s court, and Papier making regular payments to his creditors.

The high court ruled in the Wesbank case that credit providers could not terminate the debt review process while an application was pending at the magistrate’s court.

The judgment is a victory for over-indebted consumers who have approached a debt counsellor for relief, says Robyn Hersch, an independent debt management consultant at Debt Comm.

“Provided the debt counsellor has complied with the 60-day requirement (to lodge the case with the magistrate’s court) as laid down by the National Credit Act, the over-indebted consumer will receive the protections afforded to him by the act - namely the suspension of legal proceedings.”

However, the ruling comes too late for many.

In some cases, judgments have already been obtained from the high court and these consumers are now faced with forced sales of their property, says Manshon.

“It may be too late to remedy these matters for consumers whose properties have already been sold.  In other cases where judgment has already been granted, consumers would have to apply to the high court for a rescission of judgment. This can be a very costly exercise.”

In his experience, many credit providers have seemingly been trying to thwart the debt review process since the implementation of the National Credit Act,

He cites a recent example of a bank which extended a home loan at a fixed rate of 19.40% - more than double the current prime rate - to one of his clients. On a bond of R185 000 over 20 years, this consumer's monthly instalment on the bond is currently R3 056 whereas at the current prime rate, his instalment would have been R1 664 per month. 

As part of a debt review process, Manshon proposed the bank lower the interest rate to the prime lending rate – but the bank refused.

However, some credit providers have made significant strides in cooperating with the debt review process. 

SA Home Loans has introduced escalating instalments, which allows the consumer to regain financial control without exposing the institution to excessive risk.

Standard Bank and Absa voluntarily withdrew a number of terminations in an effort to assist their clients, he said.

- Fin24

Comments
  • Sharon - 2011-02-02 15:10

    At the end of the day the consumer should be more responsible with their finances. Most peoplre are overdebted through their own negligence and deserve all they get. Why should other people who pay thier accounts, car instalments and bonds subsidise the non payers.

      michaelandrebergh - 2012-02-15 08:13

      Ok Sharon, nice statement to make when you're comfortable under your parents roof, or husband that takes care, and if not the above, what if the company you work for closes down or the main part of your own business gets replaced by something else. Suddenly you would find yourself not so comfortable... you don't have any income, can't find work, and you sit in this situation because of things you could not control. Not in a million year did you expect event to turn this way, so you bought a car and a house etc... Open your eyes, unforeseen things happen in this world. You're selfish.

  • Mark - 2011-02-02 15:24

    It all boils down to responsible lending and borrowing. The new credit act is teaching South Africans to think twice before signing for a new loan and it also protects them from ruthless banks who don't seem to be too concerned about their clients legal rights.

  • Grant - 2011-02-02 15:31

    Wesbank = FNB = Heartless, life-destroying CROOKS! (IMO)

  • RIKESH - 2011-02-02 15:41

    What about the exorbitant interest rate that lenders are allowed to charge ?!!! I think it should not be more that prime +5...not 20 & 30%...Govt needs to put a regulation in place.

  • Been There - 2011-02-02 15:45

    Fnb=Wesbank only been good to me in such times. Don't deceive them, they won't bite you.

  • Rikesh - 2011-02-02 15:48

    Lenders still charge exorbitant rates of interest. Prime +5 is acceptable not the current rate that varies between 20-30%. Govt must regulate irresponsible lending as well. The middle income earners are in this continuous cycle of living in debt because of this.

  • @ GRANT - 2011-02-02 15:50

    And the client is completely blameless. It's called moral hazard and it works both ways!

  • Jay - 2011-02-02 16:10

    This is the full bench ruling from the Western Cape High Court. Its only binding in the WC

  • Freddie - 2011-02-02 16:13

    At the end of the day credit will become more expensive and harder to obtain, especially without large deposits or other security. Responsible borrowers will suffer because of reckless, overindebted consumers. Blame financial institutions all you like, they are only half of the problem.

  • MJ - 2011-02-02 16:14

    Sharon, your comment is insensitive and extremly selfish.Please explain to all how people who pay there accounts subsidise the non payers.People under Debt review are still responsible for the Debt at the end of day. The Debt review process ensure that institutions get there money owed to them at the end of the day. Remember in 2008 when interest was raised to 17%. The numerous interesst hike made payments to these individuals impossible.

  • Barker - 2011-02-02 16:16

    On The button Sharon. No one takes responsibility for anything these days!

  • puh...lease - 2011-02-02 16:27

    no Mark, it actually all boils down to banks supporting a bad employment idea in bEE (and a convinient excuse for bad service) and a margin of 3% odd. to much greed for far to long and dealing with a public that actually just doesnt give a rats arlie about the banks. they dont want to talk to the client and dictate from on high and the way they treat the client is comming back in the way that the public treats them...

  • pmo@telkomsa.net - 2011-02-02 16:30

    @Sharon, cause you are twits! Stop supporting an abusive monopoly

  • William - 2011-02-02 16:31

    FNB = How can we screw you!

  • ANON - 2011-02-02 16:31

    I personally had a business run-in with FNB. To cut a long story short, we had a R100,000 overdraft facility, and were having issues with direct debits coming off the account. After unsuccessfully requesting them to be stopped, the account went PAST its overdraft limit. After months of trying to stop these debits, and notifying the bank that we do NOT agree to exceed our limit, FNB continued to allow the debits through (they wouldnt even let us close the account). The R100k overdraft limit ended up at around R350k!!! Now, even though we only signed for R100k, and have pages and pages of documented evidence telling the banks to NOT allow pmts past our limit, we are due in court with them! This is hardly deserved...

  • Eish - 2011-02-02 16:38

    Why is there a backlog in the courts. Oh, forgot its an incompetent ANC goverment and the legal system is collapsing like all other state instutions.

  • Buddy - 2011-02-02 16:42

    Even the "more responcible" public out there will struggle even more to get finance in the future - this will lead to even higher rental rates on houses/flats, making the already wealthy owners again more powerfull!

  • Tumelo - 2011-02-02 16:53

    This ruling is a victory for justice.Banking institutes "harass" people with offers of credit cards and other loans but when a person fails to pay,the sweet talking consultant who tell a person "you are a valuable client and qualify for this offer..." now turns against a consumer with legal threats. The root cause of all this is that people have very poor financial literacy and unless this is dealt with,people will always land in trouble.Its time finacial literacy becomes part of the school curriculum.We have thousands of proffessionals who are very poor money managers.

  • Sam - 2011-02-02 17:16

    Sharon is being a bit harsh. My husband's firm went bang so no retrenchment package and was then shot in a hijacking and, as a result, has only 20% vision left. This has left us R30 000 per month poorer. Debt review is scary - you have no way of obtaining money for emergencies and you have to live on R80 a day for food, toiletries, going to movies, servicing your car, buying new tyres, additional medicines, etc. Not a case of reneging on payments, just a case of bad luck.

  • Enuff - 2011-02-02 18:19

    Thank you Sam! To those slating the "irresponsible lenders", please think again! In many, many, many cases (granted, not all) the people who are in debt review or losing their assetts are not guilty of anything other than good old fashioned bad luck! Sharon (and the other insensitive gits out there), I hope that you never find yourselves in situations like Sam's!

  • john - 2011-02-02 19:56

    Sharon...you have too much money...go to school and learn to spell please.Just to let you know that you are wrong, I never ever had issues and always paid my way - renting out property to non payers has caused me to join debt review.We received a phone call yesterday from a debt collector to get my wife's car - we have refused as we have indeed been paying the NCR monthly.They in turn have not paid the bank for vehicle-and now we are suffering.Remember,the wheel turns and I would love to see your comments not IF but WHEN you need to join us on the debt review.See you there sunshine.....Thank you courts!!!

  • Tony CT - 2011-02-02 22:59

    In defence of Sharon, she said most people and she is correct. I have stopped lending and bailing out family members who are always suffering from so called "bad luck" yet they all have cells, will not consider a border to help pay the rent etc etc. They will not take a second job and go on a spending spree whenever they get some money. No saving for a rainy day. Why should investors have their money at risk from those who do not pay.

  • Mosso - 2011-02-03 00:10

    @Sharon, Moron!! Recession left alot of people in the slum. Most of them did not have enough savings to manage for over 12 months. My cousin found himself in the similar situation and he ended up finding a job that offered him half of what he used to earn. So, Sharon alot of people are not careless when coming to managing their funds, its the system thats failing them at the end of the day.

  • Jacques - 2011-02-03 07:15

    This is fantastic news for the man on the street. When times are good the big finance pigs are just too willing to help you get into debt. But as soon as things go down the tubes, they will screw you over without thinking twice or 'help' you by bumping up your interest rate to prime plus 10 while you are under debt review ensuring that you will never recover.

  • Whatever - 2011-02-03 07:59

    Guys.....some people actually loose their jobs.....and with the absolute abundance of jobs we have available in this country, there's just no coming back from it. I have a family member who lost her job, and couldn't find one for an entire year. How many of you that is so self-righteous, can afford that? The family has helped out a lot, and at the moment the house is in the market. But, it will take years for her to get back onto her feet. Not all people are irresponsible!

  • amajuba - 2011-02-03 08:00

    Now children, Play nice! we must not look at the exceptions, but the rule.South African do not respect for contracts of any kind, tell lies about their income status, and have very little honour when dealing with money. NOW read the rules and open all your bills, and cut up the credit cards. Regretably a small per cent of people have misfortune. That's when your Finacial advisor and savings come in to play to bail one out.

  • Charl - 2011-02-03 08:30

    John- you must mean you've been paying the PDA every month, not the NCR... I am a debt counsellor and I can tell you all that there are 3 types of people who go under debt review: basically 1/3 are chancers/reckless borrowers, 1/3 are bad luck cases (retrenchment etc) and 1/3 are institutions dishing out credit reckelessly. Everybody is paying the penalty for the bubble that existed.

  • Richard - 2011-02-03 08:51

    People who are taking/accepting credit from any institution without reasonable chance of paying it back are nothing else than thieves. Too many people (all over the world) now days take credit to leave beyond their means. They destroy the chance for decent future for all of us. These people should not be helped; they should be seen as the enemies of the humanity.

  • Ptennisnet - 2011-02-03 08:55

    Millions of South Africans get by on less than R5000.00 a month without incurring huge debts (because they cannot afford to!). My question: Why do people who earn huge salaries (R500 000.00 pa or more) live such a lifestyle that they end up in debt review? Do they value things so much that they will sacrifice their financial peace of mind for it? Ptennisnet

  • Al - 2011-02-03 09:19

    @ Sharon, Thanks to the wonderful economic crises and governments failure to generate a good employement platform we have more than a million people that were retrenched and no new jobs available with nearly everyone down sizing. Please can you explain how those people could have avoid this?

  • Me - 2011-02-03 10:03

    Some people get into financial trouble, due to circumstances beyond their control. When you have been with an institution for many years, paying your bond and car on DEBIT ORDER every month. Then still they want to come to reposes your property? Is this fair? Yes, I agree. There are people out there that are opting for Debt review, for the wrong reasons. But there are legitimate applications on the Court Roll’s. It is up to the debt counsellor to investigate the finances and the circumstances that led to the current situation. The CPA will come into effect in April this year. I think that the CPA will work hand in hand with the NCA. We, South Africans, can be grateful for legislation like the NCA. If we did not have this. Our economic recovery time would have been far worse. And lastly. The normal clients of a bank is not subsidising the debt review clients. The banks have to raise provision for these accounts. The banks are making heaps of money from all their clients. Charging rates that are criminal. It is time for the banks to be there for their customers, like in a marriage. In good times, and in bad. Because chances are that these customers WILL eventually get back on their feet and will go back to that bank and support them. It is time that the bank do what they are supposed to do. Assist their clients, and not suck and spit them out.

  • Anne - 2011-02-03 10:16

    The banks still do as they please. I have a magistrate ruling with a fixed payment plan and still the banks have tried to reposses my home of 15years and my car. I went on debt councelling as I was retrenched and had to settle for a job paying about 50% of my previous one. With increasing electricity/ municipall and school fees I had no choice. The banks, especially Standard and ABSA do as they please.

  • desan - 2011-02-03 11:38

    I have currently looked at my own lifestyle and asked myself, what if I lose my job trough retrenchment? The answer is that I will not be able to afford to pay for my house nor car. Everyone wants to own these items as they provide you and your family with shelter and a means to get to work/school. You can only manage what you want at the time under a set of circumstances. Even the best of us will plan for 3 months of our debt being helod in cahs in an investment. The harsh reality is that we would not find a job so soon. The problem is complex and cannot only be attributed to poor planning. I use myself as an example and I am quite organised.

  • Renee Debt Coucelor - 2011-02-03 13:06

    Debt Review is a necessary part of the new National Credit Act that ensures people not to loose their assets, be able to pay for essential living expenses whilst paying off debt. You are still responsible for your own debt but over a longer period of time in smaller payments. The restructuring of such a debt takes 60 days whereby creditors comment on the repayment plan (which incidentally can also reduce interest on the repayment) and when this application is then refered to the court. This is a very important court judgement!!

  • Einstein - 2011-02-03 13:42

    Misleading headline.

  • @desan - 2011-02-04 08:29

    You are 100% correct - I would love to see a definition of "overindebted". I have my own business and used to keep a six month reserve for debt (house, car payments, w&l, essentials). With the economic downturn I had to use those reserves, with a corresponding loss in income...so am I now "overindebted"? Should I have sold the house, cars etc to start from scratch once things pick up again, just to please the banks and reduce my "debt"? (At a loss, as theres no market now) Fact is, even if you go by the book theres no guarantees and boy, do the banks look the other way when things go wrong! Not thank you for all the good business the last 20 years, we are together in this, no integrity, no sympathy - just mindless clones. I think the nature of our banks represent true evil!

  • Observer - 2011-02-04 09:54

    The banks are ruthless in getting their money back after the 2008 recession, the worst since 1929. Do they not remember that up to 2008 it was about 3000 bank executives in New York who bore responsibility for the fraudulent AAA grading of sub-prime mortgages that imploded, therefor an elite of about 3000 plunged 7 billion into deep recession. Viva, unbridled greed, Viva. I am currently doing a final account on a mansion I built for a bank director, and the unbridled money-grabbing attempts and evasion of payments due (which fortunately I am blocking to the last cent)are astonishing.

  • Observer - 2011-02-04 09:58

    Sorry, forgot to add under my last comment as "Observer", that the loss of jobs causing much of the local banks' repossession was ironically caused by the 3000 New York banking elite with their fraudulent ratings of sub-prime mortgages

  • Cire - 2011-02-04 11:06

    I agree with Sharon - well said!

  • Patrick - 2011-02-04 11:39

    It's Live not leave, Rich

  • david - 2011-02-04 16:19

    I bought my 1st house before the interest rates went through the roof. And just before that I could easily pay my bond. When it hit 17% i was having make extra money to pay my debts. I do agree with sharon to a point. However...... Please explain how I was to budget for the interest rate hike that occurred? I bought my house with the NCA in full swing. And judging by your post the part I don't agree with is that you call me irresponsible for allowing myself to get into that situation in the 1st place. Excuse me for trying to buy my 1st and only house. What i get angry about is how the banks all have a quiet agreement that they all charge the same interest rates on certain items i.e try getting a fair deal on anything these days. Plus there is no competition between banks these days they know you wont get better at the next bank.

  • kevin - 2011-02-06 13:21

    Hi I would like to get clarification on this particular issue.I applied for debt review in march 2010.The debt review company never,after issuing the proposal for new restucturing of our debt,never replied or corresponded with our creditors vis/a/vis standard bank with regards to restructuring our bond payments.. we only recieved the court application forms in dec 2010,but they neglected to send second deponents application form,causing further delays. The result is that home loan department standard bank has now terminated the debt review process with regards to our bond. Now we are in arrears in our repayments and are danger of forclosure. what is our recourse in regads to this incompetence.

  • Agree with Sharon - 2011-02-08 09:34

    I'm sorry, but I agree with Sharon. She's not being unreasonable or harsh yet you all condemn her? Ignorance is not an excuse - it's not the banks job to teach you. If they do, fine. If they dont, well, their job is to make money - lots of it. Way before the depression, we were told to stress test our finances e.g. by 1) living on one spouse's salary for a few months. 2) Calculating the cost of borrowing at 5-7% above the current rates - if you can't afford at that high rate, don't borrow. 3) Living on 90% or less of salary every month 4) Differentiate between needs and wants. Did people listen? Nah! Take Dave (Feb 04), buying property but not budgeting @ 17%? Didn't our folks have to deal with 25%? @Rikesh (Feb 02) - noone's holding a gun to your head. If you don't like the 5% above prime, don't borrow, or borrow from your family. @Sam (Feb 02), I sympathise with your hubby's loss of a job, but really, still talking about going to movies with an R80pd budget? And before you all tear at me, I've been there (Debtville), got the t-shire but definitely not doing it again. Now I know, in times of bouty, one harvests and stores in a silo - not going all out buying all that takes your fancy - so that the lean times (and there always will be) will not hurt so bad. My 2c.

  • Margaret - 2011-02-08 13:07

    1) With reference to what Agree with Sharon said re looking to see whether you can cope with a bond repayment several percentage points higher – if you reckon that you can afford it THEN PROVE IT by paying at that level into your bond from the first month. That way, when rates go up it makes no difference to your budget. If you are retrenched then being ahead puts you in a better negotiating position with your financial institution. 2) Job security is no longer guaranteed. Hasn’t been for about 20 years. BEFORE you enter into any credit agreement you need to think about how you will deal with your debt should you be retrenched. EVERYONE should know what sort of retrenchment packages their employers offer – this should be in their HR policies. The legal minimum is 1 week per completed year of service of your Total Cost to Company, ie your basic salary plus what the co. contributes to your benefits. Some companies offer 2 weeks. And just remember that job hopping every couple of years leaves you with a minimal package if you are retrenched. If you move for a bigger salary you need to save a considerable portion of the additional earnings to compensate. If you already have a bond that is the logical place to put the extra. 3) Before anyone assumes (a common failing, nowadays!) that I haven’t been through retrenchments (note the plural) – yes, I have – twice. The second one was in 1998 just before bond rates went up to 25%. They had started the year at about 18% and it was commonly expected that they would drop to 16%. Instead, in a matter of months, they jumped to 25%. They were increasing about 1.5 or 2 percentage points at a time. Fortunately I had paid most of the 1st retrenchment package into my bond so I was way ahead – they didn’t want to give me an access facility but I argued that I could earn 1% or 2%pa in a current account or “earn” interest at the bond rate until I needed the money. You need a squeaky clean credit record for that sort of negotiation – no late payments, credit cards paid IN FULL by due date, etc. I kept the bond up to date by paying some of my irregular, and not very good, temporary earnings into the bond whenever I knew that I would still be employed for another few weeks. 4) For anyone starting out, PAY YOURSELF FIRST. Set aside 10% of your earnings from month 1. Automate it so that you get used to not seeing it in your day-to-day bank account. Put it into unit trusts, SATRIX, Retail Bonds, anything that isn’t in a card you carry around with you.

  • Margaret - 2011-02-08 15:39

    1) With reference to what Agree with Sharon said re looking to see whether you can cope with a bond repayment several percentage points higher – if you reckon that you can afford it THEN PROVE IT by paying at that level into your bond from the first month. That way, when rates go up it makes no difference to your budget. If you are retrenched then being ahead puts you in a better negotiating position with your financial institution. 2) Job security is no longer guaranteed. Hasn’t been for about 20 years. BEFORE you enter into any credit agreement you need to think about how you will deal with your debt should you be retrenched. EVERYONE should know what sort of retrenchment packages their employers offer – this should be in their HR policies. The legal minimum is 1 week per completed year of service of your Total Cost to Company, ie your basic salary plus what the co. contributes to your benefits. Some companies offer 2 weeks. And just remember that job hopping every couple of years leaves you with a minimal package if you are retrenched. If you move for a bigger salary you need to save a considerable portion of the additional earnings to compensate. If you already have a bond that is the logical place to put the extra. 3) Before anyone assumes (a common failing, nowadays!) that I haven’t been through retrenchments (note the plural) – yes, I have – twice. The second one was in 1998 just before bond rates went up to 25%. They had started the year at about 18% and it was commonly expected that they would drop to 16%. Instead, in a matter of months, they jumped to 25%. They were increasing about 1.5 or 2 percentage points at a time. Fortunately I had paid most of the 1st retrenchment package into my bond so I was way ahead – they didn’t want to give me an access facility but I argued that I could earn 1% or 2%pa in a current account or “earn” interest at the bond rate until I needed the money. You need a squeaky clean credit record for that sort of negotiation – no late payments, credit cards paid IN FULL by due date, etc. I kept the bond up to date by paying some of my irregular, and not very good, temporary earnings into the bond whenever I knew that I would still be employed for another few weeks. 4) For anyone starting out, PAY YOURSELF FIRST. Set aside 10% of your earnings from month 1. Automate it so that you get used to not seeing it in your day-to-day bank account. Put it into unit trusts, SATRIX, Retail Bonds, anything that isn’t in a card you carry around with you.

  • James Peterson - 2011-02-09 12:01

    Greed coupled with the entire financial system is to blame here. Debt involves the accumulation of money from the future, today. In other words the bank loans you cash to buy houses and cars, and you then work today and tomorrow and 30 years from now to pay it back. The problem however, is that this concept has now shifted from being useful come big purchases to being necessary to fund small expensive unnecessary purchases. Not many people can buy a house without loaning money for it, same with cars. People's greed has shifted the concept of credit from something useful to advance forward as leverage, to being a full blown requirement to maintain their lifestyle. They talk about times being good before the recession. Times were NOT good. It was a false luxury lifestyle driven off credit that has to break sooner or later.We loaned too much money from the future and now it's time to pay back, the honeymoon is over. It's not sustainable because the money used to buy these houses and cars technically doesn't exist, it was borrowed from the future. Hence recession and depression as the house of cards comes tumbling down. The question each and every person must ask themselves (be they insolvent, under review, or doing just fine for now) is what is their current level of equity, and what is the next steps to better it. If I loan money to buy a house and a car, then get a huge raise, then loan more money to buy a bigger house and nicer car, I am in NO better position then I was before, even though I'm earning much more, and living better. The level of my equity has not changed. The problem with today's financial system is that people don't own anything anymore, the bank owns everything. The bank (all banks globally) is a puppet for the FED, and the FED is the root of all this evil. So in theory, Obama and Greenspan owns pretty much most of the world right now. The banks will get bailed out, it's only you and I that will suffer. The only people that win (or at least survive) are those that actually own their cars and houses, be it an old rustbucket and a 1 bedroom hole. You are better off than most, trust me. We need to work to gain equity, not more debt. We need to align the current financial system to be one that works in our favor. Finally, we need to understand that if you are not using credit to further your leverage, you are living too far above your means.

  • David - 2011-02-10 11:51

    @ Agree with Sharon..... I did budget for that. I put every extra cent i had into my bond account. HOWEVER. What caught me was increase services like Electricity and so on, FUEL, FOOD (nothing special in terms of food I was living on) etc. I found myself shy around R 2000 per month. I didnt go into debt review or needed to be counciled. I had to get a 2nd job. I am agreeing in some parts, but there was a time that there was no way to foresee a 50% increase here and 30 % there. And then being fed bulldust about inflation sitting at 6%. The figures do not add up. And lending money from family who themselves need to survive is not smart. Kill 10 people to help save 1 is not a smart move. In the end I survived it and it was my 1st time experience in this regard, however there was no help from anybody in terms of what to expect. Retrenchment packages only materialize if the company retrenches and actually has the funds to pay out.

  • The Consumer - 2011-02-23 08:59

    We have clients who is under debt review due to the recklessness of the banks. A consumer came to see us in 2008 her credit card debts was R480000. We called a certain bank for the supporting documents which included a copy of the credit report and the salary advice. The consumer credit report showed total debt exposure in 2006 of R193000 and R11000pm to services this debt. The salary advice showed net salary of R10000pm. The consumer was offered a further 14 credit cards which increased to R480000. It very easy to blame the consumer but it is the stupidity of the banks to give her this credit (NCA act 81(2) A credit provider must not enter into a credit agreement without first taking reasonable steps .).The most important about credit card debt is that the banks haven’t got copies of the original agreement and that they are serving summonses out of the wrong courts as section 90 of the NCA applies(section 90 (2)(k)(vi)(bb) to “the court where the consumer resides or works or where the goods in question are ordinarily kept”).. These judgement can be rescinded at the cost of the bank.

  • THE CONSUMER - 2011-02-23 09:10

    THE BANK CEO ARE NOT FOLLOWING THE COPORATE GOVERNANCE It refers to seven characteristics of good corporate governance: Discipline - a commitment to behaviour that is universally recognised and accepted as correct and proper. Transparency - the ease with which an outsider is able to analyse a company's actions. Independence - the mechanisms to avoid or manage conflict. Accountability - the existence of mechanisms to ensure accountability. Responsibility - processes that allow for corrective action and acting responsibly towards all stakeholders. Fairness - balancing competing interests. Social Responsibility - being aware of and responding to social issues.

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