If you are struggling to make ends meet, here is some advice to help you keep your car.
Young couple going over their finances. PHOTO: www.sheknows.com
WHILE the Covid-19 pandemic has resulted in many people suffering hardships, there are options available for people to help avoid the worst.
“With the country in an economic downturn, chances are your finances are feeling the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your installments, the bank can take steps to repossess your car,” said Judy Bryant speaking for her clients’ personal finance website Justmoney.
JustMoney has offered some insight into what takes place when a lender wants to repossess a vehicle you might be relying on.
They also have some tips to help you prevent the loss of your property.
“According to Jaco Hamman, an attorney at Hahn and Hahn, when you miss your first payment and the lender notifies you of such and provides you with a certain number of days to catch up on your payment and you fail to pay, the lender is entitled to cancel its finance agreement with you,” said Bryant.
According to the legal advice she received from Hamman, Bryan said there are steps a lender has to take if they are planning to institute action against you.
“The summons will be delivered to your address via a sheriff. If you don’t defend the summons, then the lender can obtain judgement and a warrant of execution. It’s only through this warrant of execution that a sheriff can repossess your car,” said Hamman.
Bryant and Hamman both caution that the lender is not to use lies in order to bully people who owe them money. One of the lies often told to vehicle owners according to Bryan is that your vehicle can be repossessed without following due process.
The option to ask for adjustments to your car repayment installments is similar to what you could request of any creditor. “You can ask your creditor to adjust your car installments until you’re back on your feet,” said Bryant.
Hamman advised that it is possible to avoid repossession by making a payment arrangement with the lender. If that also fails, debtors can decide to opt for debt counselling if they qualify for it.
“It’s important to remember that once you’re under debt counselling the only way to change your counselling status is to pay off all your short-term credit agreements,” said Hamman.
Hamman described how many lenders make use of debt collectors to repossess cars describing stories of debt collectors arriving at a debtor’s home brandishing a form, insisting the debtor needs to sign the form and give back the vehicle.
“This form is actually a voluntary surrender form in which you state that you voluntarily surrender your vehicle. There’s no obligation whatsoever on you to sign such a form and return the vehicle to the lender or its debt collector,” says Hamman.
“Be sure that it’s a legitimate repossession through the sheriff. If not, you’re within your rights to refuse to hand back the vehicle,” he said.
Section 127 of the National Credit Act gives provision for consumers to voluntarily surrender their cars. If you find that you’re no longer able to keep up with your car payments, you can hand it back to the lender. You can do this by writing a letter of notice informing the lender that you want to terminate your contract.
After five business days of handing in the letter, you must return the vehicle or arrange with your creditor how the car will be returned. Your creditor willthen give youwritten notice setting out the estimated value of the car.
You will have 10 days to decide whether you still want the car or not. If you’re no longer interested, the lender will sell it. If there’s a shortfall in the sale, you will still be liable to pay for the vehicle. However, if there’s a surplus, the lender will credit your account.
Caxton Local Media Covid-19 reporting
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