The impact of Covid-19, and the ensuing financial crisis, will have a lasting impact on society and business as a whole. Those who are unable to work because of the lockdown are facing serious economic challenges. Because of job losses and reductions in income, many South Africans are worried that their assets such as their home, car or other financed goods could be repossessed over lack of payment. Knowledge is power especially when it comes to these types of financial matters.
To assist consumers to be empowered and to know their rights, The Ombudsman for Banking Services outlines the differences between Repossession, Surrender of Goods and Bank Assisted Sales.
Repossession
“Having assets repossessed can be traumatic, not to mention the added legal costs and the
burden of having a judgment against you. Even though you may be struggling financially, you
need to avoid having any of your goods repossessed,” says Kwanda Vabaza, Manager: Communications at The Ombudsman for Banking Services.
“Voluntary Surrender and Bank Assisted Sales allow for cost effective and a
less strenuous method of disposing of your assets if needed. The consumer has the choice to
decide which route is best for them,” he says.
Surrender of Goods
As a consumer, if you are no longer able to pay for an item that you purchased on credit, Section 127 of the National Credit Act (NCA) 34 of 2005, allows you to surrender the goods to the credit provider to resell in order to assist you by relieving the debt. Section 127 of the National Credit Act (NCA) gives you the right to terminate the agreement and surrender (return) the goods to the credit provider for any reason and at any stage before the credit provider institutes legal action to recover the goods.
After selling the goods, the bank must provide you with an account showing the amount the goods were sold for and the amounts credited and owing on your account. Furthermore, if your payments are up to date when voluntarily surrendering the goods, you may unconditionally withdraw
the notice you signed to surrender the goods. There is also no limit as to the number of times the consumer may surrender the goods
Bank Assisted Sales
“Particularly where property is concerned, a Bank Assisted Sale is a better option than an auction where a property may be sold for less than its worth. Furthermore, with this option, a consumer can save themselves from the burden of legal costs, a judgment credit bureau listing and a court judgment in their name” says Vabaza.
Benefits of Bank Assisted Sales for consumers when a property is sold with the assistance of the bank, includes that discounted attorney fees may apply provided that the attorneys are appointed by the bank; the choice regarding which offer to accept remains with the consumer and the bank may agree to a discount on the repayment of the shortfall and, in some instances, the repayment may be made interest free over an agreed period of time.
Furthermore, if the consumer is behind with rates, taxes and levies, these may be added to the loan balance and will form part of the shortfall.
Contact the Ombudsman for Banking Services South Africa on 0860-800-900 or go to
https://www.obssa.co.za/ for more information or to lodge a complaint.
PERSONAL FINANCE