Episode 1
This blog post has had a long
incubation period. Probably not quite the right word, it is more a question of
was I going to go the route or not but I do think the time has come to start
pulling the lion’s tail.
As we all know DEBT and CREDIT
probably means the same thing. They are both swear words and worse than the one’s
you hear on TV. The moment you are given
credit by a Financier you are in DEBT. The process and documentation involved
are really very intricate although most financiers do not really think so. The arrangement between you and the creditor
now are regulated by various acts. I am discussing this specifically in the
South African context.
Over a long period of time the
government of the day, in its unfathomed wisdom created acts that govern the
relationship between the parties and I am quoting a few of these:
1.
The present National credit act
2.
The Consumer affairs act
3.
The Supreme court act 1959
4.
The Magistrates court act 1979
5.
The attorneys act 1979
6.
The debt collectors act 1998
There are a few more but these are
the main acts I might refer to in this post.
The relationship between a consumer and
a creditor are born out of the consumers’ need for money and the creditors’
ability and willingness to lend this the consumer. This is not the extension of a service to the
consumer, it is the need (or greed) of the creditor to make money out of the
transaction.
As an interlude the
above definition nullifies all banks’ claims that “we are there for you” or “what
can we do for you” and all that bull.
The present National credit act (NCA)
governs to a great extend the initial relationship between Creditor, Debtor,
contract requirements, defaults et all.
For the purpose of this post I am
specifically referring to the possible (and in most instances inevitable)
decline of the relationship if (when) the lender defaults. What is import to notice here is that the
financier (Bank – whoever) evaluated the debtor’s financial position as per
instruction by the NCA and upon finding
it to their liking extended the credit to the debtor with the aim of making
money out of the transaction. The
relationship always had a 50/50 chance of success at best.
Either the debtor would be an angel
and keep his job, get increases at regular intervals and pay his required
payments as arranged. Or he could lose his job, his business could fail, he
could be retrenched, he could get ill to the extent that he no longer can earn
an income. There are a few hundred more
reasons this could happen. The point I am making is that this invariably happens to good
people too!
Unlike what banks say in some of
their threatening letters I still have to encounter a debtor who “Choose not to
pay us” or “choose not to honour your agreement”.
Now once(if/when) this relationship
do go south the client's status immediately change from “client” to “ Problem” with the accompanying change in tone of voice when he is spoken too.
Also the accompanying change in facial expression, tone of letters etc.
How does a debtor handle this? I will not go into the reasons for
the decline but only as to what happens and how does a debtor defend himself
against the onslaught of verbal abuse he or she is going to have to endure.
In episode 2 I will discuss what exactly happens to the
creditor and what is done from the creditor’s side.
In Episode 3 I will discuss the actions a consumer can take
to defend himself against the onslaught.
No comments:
Post a Comment