Question posted in the National Credit Act Law category relating to Western Cape
I have a personal loan (owing R190000) that I am unable to pay. I loaned R250000 2018 and made payments until I lost work after emigrating to Australia. The bank do not have my contact number, correct surname (have married since), address and I haven’t responded to any communication via email - multiple attempts of communication from both the bank and debt collectors. A civil debt summons was dropped off at my old address last week and the bank stated they have lost the original loan agreement (stated in the summons). The only thing I have in my name in South Africa is a Momentum RA - no assets etc.
What are my rights? What are the next steps? What would happen if I remain out of contact?
Should the summons not have been give to me in person?
I have read that debt can be prescribed if no contact is made for 3 years? Can they legally withdraw from my RA? Will/Can my family be notified or held liable for this debt - parents, siblings, husband (husband is not listed on any accounts etc)
They have lost the initial agreement BUT surely they can seize my account records and from there prove the loan and acceptance since I made payments for over a year?
I understand the moral obligation of paying my debts but I am financially strapped and would like to be aware of my legal rights.
What are my rights? --> Well, obviously you have the right to challenge the claims as laid out in the summons in court proceedings. You don’t have the right to a free attorney, but you can appoint an attorney (at your own cost) to act on your behalf and defend the claims.
What are the next steps? -->The bank will receive the sheriff’s return of service and will then file the documents at court. The bank could then apply for a default judgment to be entered against your name if - (i) the bank can satisfy the court that the summons was served in terms of the rules of court; and (ii) you have failed to defend the summons within the time period provided.
What would happen if I remain out of contact? --> See above. The bank could take a default judgment against you.
Should the summons not have been give to me in person? --> The summons does not have to be given to you in person. The summons must be served by the sheriff, and he has some options, including – leaving a copy at your current residence; leaving a copy at your current work place; or delivering a copy to the address which you chose when you completed the loan agreement (which is probably your old home address). This is called your domicilium address. So, in theory the bank could have instructed the sheriff to serve it at your domicilium address, and a judge could very well accept that as good service.
I have read that debt can be prescribed if no contact is made for 3 years? à Yes, the bank has 3 years to issue a summons, otherwise the debt prescribes. This date would be calculated from the last date that you made a payment. Or, if you admitted to them in writing that you owe the money, that would interrupt prescription from running.
Can they legally withdraw from my RA? --> No.
Will/Can my family be notified or held liable for this debt - parents, siblings, husband (husband is not listed on any accounts etc) --> No. They are your debts, not your family’s debts.
They have lost the initial agreement BUT surely they can seize my account records and from there prove the loan and acceptance since I made payments for over a year? --> They can submit a copy of your agreement, or they can submit a copy of a blank agreement as was entered into at that time and then make the allegation that “this” is the version of the agreement that you agreed to. If you don’t dispute it, then a court might very well accept it as true and correct.
I understand the moral obligation of paying my debts but I am financially strapped and would like to be aware of my legal rights. --> Exactly.
What happens/is the process if I don’t act on the summons issued - what are the next steps and how is the judgement issued?
Is it my understanding that because the summons has been issued my debt cannot prescribe within the 3 year timeframe... is that correct?
Will the debt be owed even if I get issued a judgement - does the judgement last 7 years from when it’s paid or from issue of the judgement with the debt still standing?
If the debt stands after judgement does it gain interest in that time?
Can I be arrested if I don’t respond/go to court etc? Will a warrant be sent to my old address, and if so, will that warrant show the amount owning like the summons did? (I’m worried about when I return to South Africa at a later date)