Types of Listings

NOTICE TYPE LISTINGS

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Invisible

1.1 Sequestration

Sequestration is when a person is declared insolvent because their liabilities are greater than their assets; Sequestration is sometimes referred to as bankruptcy or insolvency and can be either voluntary or compulsory.

Voluntary Sequestration
Voluntary Sequestration is when the debtor him/herself applies to court for the acceptance of the “surrender of his/her estate”. A court can accept the surrender of the debtor’s estate and grant the Sequestration order only if it is satisfied that: the debtor’s estate is in fact insolvent, the debtor’s estate is able to pay for the costs of Sequestrating the estate and that the Sequestration is advantageous to the creditors. By law a person will only be treated as insolvent once his / her estate has been sequestrated by the court. A Sequestration Order is a formal declaration stating that the debtor is insolvent.

When a Sequestration is granted the court will appoint a Trustee who will be in control of the debtor’s estate. The debtor will surrender all his/her assets to the Trustee who will in turn sell the assets to defy the administration costs and pay a possible dividend to the creditors in accordance with the respective ratings. Any debt existing prior to Sequestration is unrecoverable after rehabilitation

Compulsory Sequestration
The second way in which a debtor’s estate may be sequestrated is called “Compulsory Sequestration”.  This type of Sequestration is made on application by one or more of the debtor’s creditors. A court may grant an application for the sequestration of a debtor’s estate if it is satisfied that:

  • The applicant (creditor) has established a claim against the debtor
  • The debtor has committed an act of insolvency or is insolvent
  • There is reason to believe that it will be to the advantage of creditors
1.2 Rehabilitation

When you are rehabilitated it means that you are no longer insolvent and can be allowed to trade on normal terms. Rehabilitation enables the insolvent to make a fresh start, free from his pre-sequestration debts and from the restrictions placed on him by the Sequestration.  Rehabilitation may take place automatically after 10 years from date of Sequestration or by application to the Court who granted the Sequestration Order. The Rehabilitation process takes approximately 8 – 10 weeks, provided all requirements have been complied with. The Hahn & Hahn way is to assist you by preparing an application to the High Court and to restore your creditworthiness.

1.3 Debt Review

Debt review is a type of mediation process for over-indebted consumers. A consumer can seek the assistance of a debt counsellor or may be referred to a debt counsellor by a court. The main purpose of debt counselling is to assess a debtor’s state of indebtedness, facilitate a monthly debt repayment plan with the credit providers and to make recommendations to credit providers and / or magistrate courts on behalf of over – indebted consumers
Debt counselling restructures instalments to allow the debtor to pay his / her debt and meet their basic living expenses. Debts are paid monthly and a debt clearance certificate is provided and debtor removed from the credit bureaus once the debt is settled in full.

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Invisible

2. Judgement

If you fall behind with your account payments and fail to respond to reminder letters, your creditor will send you a letter of demand. If you fail to respond to the letter of demand a summons will be served.  You have 10 days to defend the summons, after which your creditor will apply to court for a Default Judgment without further notice to you. A judgment means that a court has ordered you to pay your debt.

Your creditor now has the legal right to collect this debt from you by:

  • Sending a Sheriff with a writ of execution to attach and sell your possessions;
  • Proceeding with a Section 65 hearing against you whereby the court conducts a full financial enquiry.  The debtor is required to appear in court and be present throughout the hearing.  Upon conclusion of the financial enquiry, or upon the offer and acceptance of payment in instalments, the court my order that an Emoluments Attachment Order be presented to your employer, which requires your employer to deduct money from your salary and pay it over to your creditor.

A judgment will remain listed at the credit bureaus for 5 years but the debt is valid and enforceable for 30 years. Rescission of a judgment might still be necessary.
Should you have a valid reason for disputing a Judgment that was granted against you, the Hahn & Hahn way is to consult with you to determine the merits of your defense and to explain the requirements for rescinding a judgment without necessarily settling the judgment debt first.  It is important to bear in mind that should there be a valid claim by your creditor for the payment of a debt, albeit wrongly recorded in the Judgment, such a rescission will not absolve you in toto from your obligation towards your creditor, but will merely grant a respite from the pressure of a negative credit profile listing.

3. Adverse (Default) listing

Adverse listings are recorded at a credit bureau if you opened an account and failed to make the required monthly payments. Your credit provider will contact a credit bureau directly requesting the adverse to be listed against your credit report.

If the default relates to an enforcement action, such as the collection being handed over for recovery, legal action being taken or the debt being written off, the default remains on your credit report for two years. If the default relates to a subjective classification of your behaviour, such as delinquency, slow paying, absconding or not being contactable, the default remains on your credit report for 12 months.

Adverse listings can in most circumstance be updated to a “Paid in full” status upon instruction of your creditor.  Adverse listings can only be removed in limited circumstances and after a full investigation by the Credit Bureaus themselves.  It is important to at least have the listing amended to reflect that the account was paid in full.

4. Payment Profile

Payment Profile is a summary of your monthly account payments. The most important way of improving your credit profile is to pay your accounts on time. Each month your payments are recorded in the Payment Profile section of your credit profile and provided you have been paying your accounts on time for at least six months, or preferably a year, you stand a far better chance of being granted credit.

5. Collection information

Collection Information relates to accounts that have been handed over to a collection agency. Our legal team can contact the collection agency to obtain the outstanding balance and make comfortable payback arrangements on your behalf. Once the debt is settled we will get the paid up letters and update the account with the bureaus.

Data retention periods for the various types of listings:

  • Adverse (Default) listings: 2 years
  • Judgments: 5 years
  • Sequestration: 10 years
  • Rehabilitations: 5 years
  • Administration orders: 10 years
  • Debt Review: Until discharged

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