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THE CONSTITUTIONAL COURT HAVE MADE A RULING ABOUT FERRIS DEBT REVIEW MATTER

Debt Counsellors have been waiting for a while to hear the result in a debt review related matter that has made it’s way all the way to the Constitutional Court of South Africa.

Courtroom

 

 

 

 

 

 

 

 

 

The matter:Ferris v FRB was given in favour of the credit provider (as have all previous judgements on this matter).This means that FRB can proceed to sell the consumers home on auction to settle some of the debt , if they want and then ask them to pay off the shortfall over time and are allowed to ignore the debt restructuring court order.

 

Why ignore the other “issues”?

FRB did not respond to the consumers debt review proposals and the Ferris’ argued this showed bad faith (as per the Collett judgement) and wanted the debt put back into their debt review. So why did the Constitutional Court ignore this and other info about the service of 86(10) letters (as per Sebola)? Well, it comes down to one very important detail: the consumers missed a payment. This means the debt review fell away. All other considerations in the courts opinion are thus irrelevant. The missed payment showed that the consumers did not take the restructuring seriously. The couple failed to show good reason  (in their papers) why they had missed a payment.

Never miss a payment

Some consumers think that making a payment monthly is optional and that if an emergency comes along they can miss a payment. Some consumers would rather use their monthly payment amount to buy gifts in December for family or to travel home to visit family. Others want to use the funds to pay for school fees and school books and clothes in January because they have failed to save properly as per their budget from their Debt Counsellor. They fail to see the larger consequences and assume that the Debt Counsellor will be able to smooth things over even if they do miss a payment. If you are under debt review then you should learn from this matter. Never, ever miss a payment. If you do miss a payment then you should expect to lose your assets and to end up in serious trouble. Sequestration may be the only other option for you at that point if you have property with some liquidity or funds to meet the requirements for sequestration.

So, as the Ferris’ have now sadly learned, it is vital that you never, ever miss a debt restructuring payment!