Summonses Are Scary
When you enter debt review you may incorrectly assume that all your creditors will always cooperate with your Debt Counsellor and your debt restructuring court order. The thought that they may have different departments at the same firm who don’t know or pay attention to your debt review may seem foreign but can be a reality. Especially where you have been in debt for some time and your debts may have been handed over to outside collections agents or sold to other parties.
Of course, if you ever miss a debt review payment or pay too little one month the credit providers have legal rights to go after you and take you to court again, meaning that you could lose the benefit of the debt review and all the hard work you have already put in in the past few months or years under debt review.
A Section 129 Letter First
In most cases, if a credit provider decides to seriously escalate their collections efforts they will probably send you a proper letter of demand first (look for terms in the letter like ‘Section 129‘ of the National Credit Act or ‘Section 130’). The colour of the paper of such letters doesn’t matter – some credit providers find if they send a letter on red paper it scares consumers into paying. This is a letter that warns you to pay up or get sued. These letters also will tell consumers to go to a Debt Counsellor within 10 days to avoid further legal action if they are not able to pay.
If you have been in debt review for some time (and perhaps you foolishly missed a payment) then you may not get such a letter of demand. You may suddenly get a summons delivered to you.
Always Make Sure Your Credit Providers Have your Current Address so that you Don’t Miss Important Mail
If you Receive a Summons What Should You Do?
If you get a summons don’t ignore it! It is the start of a legal process that you can either be part of or simply be on the receiving side of. It will impact on you negatively even if you just ignore it.
To find out more about the summons you can ask your local sheriff of the court for more info about it (take it with) or you can contact the Attorneys for the credit provider, whose details will be on the document. You don’t have to make any promises or fight with them but you can gather some additional information.
Contact Your Debt Counsellor
It is always the best course of action to inform your Debt Counsellor of a summons (or even scary letter). This doesn’t mean that it will go away but it does mean that you have some help in your corner as you start to defend the matter.
Your Debt Counsellor may refer you to legal help, perhaps the Attorneys who have already helped you with your debt review court order. Alternatively, if you cannot afford legal help they may advise you on how you will go about defending the matter yourself at court. Yes, that is a little scary. You will have to prepare some papers, go past the court at least twice and will have to take time off from work to wait in a passage outside a courtroom and eventually talk to a magistrate or judge about your situation. But if you do nothing then you are likely to end up with a judgment against your name.
NCA Section 86(11)
The National Credit Act makes provision for when a credit provider decides not to cooperate with a debt review and tries to take legal action against you. In Section 86(10) it tells credit providers who they need to send notices to before they try to take further legal action. In NCA Section 86(11) Magistrates and Judges are empowered to stop such legal action and put the account back into the debt review and organise payments in almost any fashion they see fit (unlike in other parts of the Act which have stricter rules).
In NCA Section 86(11) Magistrates and Judges are empowered to stop such legal action and put the account back into the debt review
If you have Missed or Short Paid
It is important for the consumer to realise that if they have broken the requirements of the debt restructuring court order for no reason then the court is unlikely to decide to help them now. They could well lose the defence and the account could stay outside of debt review. They could then end up with a pesky judgement against their name and face further legal battles if the credit provider wants some of their pay each month.
If you have Stuck to the Debt Review
If you have stuck to the debt review and can show all the payments and your existing court order then the court is more likely to simply tell the credit provider to ‘play nice’ and stick to the existing court order. They are also more likely to tell the credit provider to pay for all the legal fees that have now come up.
Defending a matter at court with the help of Attorneys will cost something. If you have paid “legal fees” as part of your debt review (normally right at the start somewhere) then you should be aware that the NCR now advise that these fees only cover getting your debt restructuring court order (or trying to) and not additional legal costs for other things along the way. Keep in mind that you can always ask your attorneys to ask the court to make the other side pay your legal bills but the court may decide not to, leaving you unfortunately with another bill to pay. It is very much up to the court.
If you receive a summons then you shouldn’t panic but you shouldn’t ignore it either. Simply reach out to your Debt Counsellor straight away (you pay after care fees every month remember?) and they will guide you through what to do next.