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Ordered to pay for a surrendered car

Nov 16 2016 01:58
Liziwe Ndalana

A Fin24 user who voluntarily surrendered her car and was recently ordered by the car dealer to pay up, seeks advice on what to do next.

She writes: "I voluntarily surrendered a vehicle which was less than six months in my possession. This was recommended by my debt counsellor since it was my second car on credit. My debt review process was finalised eight to ten months ago already and now the bank who financed the car contacted me about the shortfall of about R60 000 - after the car was sold and which they say I need to pay.

"My counsellor suggested that I need to make an offer on what I can afford to pay. I am obviously not it a position to afford this payment and I need advice on what options do I have in this situation.

"Thank you for your help."

Wikus Olivier from Debt Safe answers:

The best option would have been to include the shortfall amount in your debt review application, but since this is finalised, you should advise the bank on your current situation and negotiate a monthly repayment towards this shortfall. Unfortunately you are legally liable for the shortfall, and should you not pay this, the bank does have the right to proceed with legal action against you.

I suggest you talk to a debt counsellor because Section 127 of the National Credit Act contains specifications and rules about surrendering of goods. (Determine if the process was done according to the specifications in the Act).

*(3) within 10 business days after receiving a notice under subsection (2), the consumer may unconditionally withdraw the notice to terminate the agreement in terms of subsection (1) (a), and resume possession, unless the consumer is in default under the credit agreement;

Also, if you haven’t received your Clearance Certificate, you can get permission to extend your debt review process.

Hope that helps!

* Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

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