Question posted in the National Credit Act Law category relating to KwaZulu-Natal
I have R300K in unsecured debt that I am unable to pay off. I was left unable to work last year and started being paid R15k by disability insurance. I went on to debt review then with debt busters. I made them aware of my insurance payments ending in December and that I was unemployed. I said I was looking for work but I wasn't sure how much I would be paid. In December I had an income of R2K a month and my debt review payment was R6800. My mother had also since had a stroke and is unable to assist financially. We as a family at the moment have a good asset in a house in my mothers name but very little liquid money. We are all struggling. Anyway I told Debtbusters I didn't have enough monthly in December and they gave me a three month holiday. I have since been able to pick up more odd jobs but not enough to to cover R6800 a month. I am of course working on this but it isn't a reality right now. I have asked debt busters to restructure my debts, and that I am happy to pay but can't afford that amount. They say they cannot restructure and I have to pay it. I asked debt rescue and they said they can't help me. I looked at sequestration but I don't have that lump sum and if my mom passed I am worried about what will happen to the house and retirement annuity I would inherit. Also Debtbusters wanted me to sign something for court and send payslips, I don't have pay slips when I communicated that multiple times no one would reply so to my knowledge nothing was signed for court. So I am very stuck at the moment and I don't know what to do. Help would be appreciated
Message from the Lawyer
Hi there and thank you for your question,
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From what you've explained, I honestly think that sequestration is your best bet. Or, wait until one of the creditors gets cross enough to sequestrate you themselves. But then they might just be spending money on sequestrating you without receiving any money back from your insolvent estate. So that might not work all that well.
I think that you should get the sequestration done before your Mom passes away, because otherwise your creditors could come after your Mom's house... and that wouldn't be great for you.
When you talk about a lump sum payment for the sequestration, are you talking about the lawyer's fees for the sequestration? If yes, then what amount were you quoted?
If you don't have payslips, or a guaranteed income from a job each month, then I'm really not sure that debt review is going to work for you, because the whole idea behind debt review is to restructure your debt based on an income... and you don't have a guaranteed monthly income, so I don't see how it would work.
Please write back to me to explain a little more so I can help.
Message from the client
They never gave me quotes just showed the restructuring. I told them the situation would change though I was under the impression the amount could be restructured again if need be. It looks like they charged me for court stuff in my monthly installment but I never signed anything. They asked but I had no pay slips to provide. My insurance payments ended and I was able to earn a small salary and I work small gigs part time teaching privately, but I am unable to make such a large payment every month right now. Could I not speak directly to the creditors and come up with a different payment plan? If the worst happened and my mom passed while I was under sequestration wouldn’t the house be in someone else’s control? From what I understand someone else’s controls your affairs if you are sequestrated,
Message from the Lawyer
While under debt review your creditors will only talk to your debt counselor. Not you.
Your Mom should update her Will to say that she only leaves the property to you if you are NOT under sequestration. If you are, then the house is left to a trust. That will put the house beyond the reach of your trustees.