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How does repossession work in South Africa?

Repossession - Your rights

Many consumers reach out to credit providers to open accounts like store cards and credit cards. Houses and cars are also purchased to repay in monthly installments.

However, due to the economic climate in our country and the cost of living, a number of consumers end up defaulting on their credit agreements. Luckily, some will make it up and rectify the defaults, but unfortunately, most people don’t. This is when your assets, like your home and your car, could be at risk for repossession. 

I’ve missed a few payments, now what?

To recover the monies owed, credit providers will start with the debt collection process. They may start calling you to bring your payments up to date. Unfortunately, some consumers don’t answer phone calls from credit providers and they then proceed to take legal action against their clients. 

My credit providers have contacted a court of law. Is that legal?

Yes. A credit provider can approach a court of law for an order to enforce a credit agreement if the account is in arrears for at least 20 business days.

If the credit provider has delivered a written default notice informing you of the impending legal action, it is recommended you consult a debt counsellor, consumer court or alternative dispute resolution. You have 10 business days to respond to the credit providers or take the necessary advice to rectify the default payments.

If you've received a Section 129 Notice, do not delay! Let us contact you about debt review to protect your car and your house from repossession. 

Contact me about debt review >>

Watch this video with Founder & CEO of Meerkat, David O'Brien as he explains the debt review process.

Can a bank or credit lender repossess my car after I've missed a payment?

Moku tip: Be very careful about signing any forms that a debt collector or creditor asks you to sign when attempting to repossess your car. This is usually done to claim voluntary repossession from the consumer.

A credit lender (bank) can approach a court to have your vehicle repossessed, but only after:

  • You have received a Section 129 notice (letter of demand) after your account has been in arrears for 20 days or more. 
  • You have been served with a summons (legal document) by a Sheriff of the Court that gives you an opportunity to defend yourself. 
  • A Sheriff of the court delivers the original warrant of execution (original court order) stating that your vehicle can be repossessed.

Very important to note that a bank representative or debt collector cannot serve you with this summons or the repossession documents. It needs to be served by a Sheriff of the court. 

Why do they need to notify me? They won’t stop harassing me!

This is used to notify the consumer that they need to bring their payments up to date before they start the litigation process against the defaulting consumer.

How will they notify me?

If, after receiving a Section 129 Notice, you have not acted within 10 days, you will then be served with a summons by the Sheriff of the Court at your place of work or place of residence.

I can’t afford to pay – can I hand over my assets to make up for the repayments?

Yes. This is called voluntary surrender. This includes assets like vehicles and furniture that were bought under an instalment sale agreement.

What do they do with my assets once I return them?

The credit provider has to sell these assets (usually at a public auction.)

So what are my rights?

According to the National Credit Act (Act 34 of 2005), there are several legal steps that need to be taken before any goods may be repossessed:

Step 1: A section 129 letter of demand

The party collecting the debt has to send you a section 129 letter of demand to pay the debt. Remember – this letter may only be sent by registered mail or delivered to you personally. The party must be able to prove that you have received the letter of demand by means of a Post Office Track and Trace system report or your personal signature.

Step 2: Sue the debtor by issuing a summons

The summons (legal document issued by a court that indicates the litigation (legal proceedings) have started) will be served at the debtor’s last known address. The summons indicates that the creditor is suing you. It will also contain the court at which you need to appear and the details of the case made against you. If the summons is served at your previous address, it is regarded as sufficient even if it was not served on you personally.

Step 3: Obtaining a judgement

Once judgment (a finalised decision made by a court) is obtained, the credit provider can continue with obtaining a warrant to repossess the goods. This warrant is issued by the court and sent to the sheriff.

Only the sheriff may give effect to this warrant and repossess your goods. A debt collector or creditor cannot repossess your goods.

Step 4: Confiscating goods

When the sheriff arrives at your address, he or she must hand the original warrant to you. You are not obligated to sign anything when your goods are taken. The sheriff will then confiscate the goods and store them for a few days. This gives the defaulting consumer a bit of extra time to make up the amount due.
However, if the goods remain in storage and no payment is made - the sheriff will sell the goods at a public auction.

 Get on top of your debt today!

Avoid the stressful repossession process and make sure your debt repayments are on track. Contact the team at Meerkat and we’ll provide immediate financial relief and protection from creditors. We enable you to pay off debt in an affordable way without losing assets. You pay one reduced installment and in many cases, we can reduce the interest rate. NO upfront fees. 

Contact us by clicking below to get started.

Contact me about debt review >>

Who is Meerkat?

Meerkat is a financial wellness company that wants to help South African consumers do MORE with their money. We can help with debt repayment negotiations, provide affordable insurance and help you kickstart an emergency fund. We have been voted as one of the Top 10 Large Debt Counsellors in South Africa!

Fill in the contact form on our website to receive a free callback from the Meerkat team today.


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