If I lose my job how do I address my creditors? Often times consumers are faced with the ugly truth. Jobs are scarce and retaining a job is frequently a challenge for some consumers. So what do you do about your creditors when you lose your job? The answer is found in the National Credit Act (the Act) and sources connected thereto. Primarily what we are faced with is a consumer whom instantly enters a place of over indebtedness due to the fact that income to that particular consumer is no longer a guarantee. A consumer whom is in such a position would need to attend the offices of a debt counsellor and complete and application for debt review. This application initiates the debt review process and notifies all your credit providers and credit bureaus of your application. Your debt counsellor will then collect all relevant information pertaining to the process and conduct an assessment. Upon notification of your application for debt review / restructuring, a consumer is granted a moratorium period in order to complete the debt review process. Due to the fact that income is no longer a guarantee the matter would need to be treated as urgent. Of primary concern in such circumstances is the possibility of re-employment or obtaining a sustainable income. This would depend on the field of expertise of the consumer, the consumers employment history, the consumers experience, active participation in seeking employment and other such related issues. The consumers debt counselor may after completing the debt review process, on the shortest time scale possible, bring a court application requesting that the consumer be declared over-indebted and that payment under his/her credit agreements be postponed for a specified period of time. It is practice that this period not exceeds six months and is dependent on the circumstances of the consumer that exist at the time. Only payment terms are postponed not the interest on the capital amount and related provisions in the credit agreement. What is achieved by this in terms of the law? The consumer is declared over-indebted and placed under debt review. Rights are extended to the Consumer under the National Credit Act, which prevent credit providers from enforcing the rights to collect on the full outstanding amount during the period of the Court order. Further, no default would accrue during the time of the Court order as payment is postponed and is thus not due and payable. You as the consumer have a period of three to six months to obtain employment and gain a sustainable income. You, in conjunction with your debt counsellor, can monitor developments and gauge your rehabilitation. A decision will then be made as to how to manage your debt going forward. (This post is merely for informative value and each persons circumstances are entirely dependent on the circumstances that exist at the time.)
Posted on: Fri, 29 Nov 2013 07:19:26 +0000
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