Real Estate Investor Magazine South Africa June 2013 | Page 32

RESIDENTIAL
It is important to get separate reports from each
of them, because their databases differ.

Step 3 - Clear the small listings first
Start off with removing the easiest and smallest
listings f irst before moving onto the more
complex ones.
This is generally good advice, however, one
should probably also take into account which
of your credit providers charge the highest
interest. By tackling those debts f irst and
settling them as quick as possible you could be
saving a substantial amount of money.
Adverse information such as default payments
That one small payment you missed and forgot
about – such oversight will have a negative
impact on your payment profile
Generally this type of listing can be removed
without any court involvement and it may
take you up to six months of clear trading
to re-establish a good trading record and
payment profile. What you need to do is pay
the amount outstanding and make sure that
you do not have any late payments in the future
or, if the amount is incorrectly deemed as
owing, then you need to challenge this default
listing directly with the credit bureaus.
If you do decide to cha l lenge adverse
info rmation on your credit report, and lodge
a dispute, remember that the institution to
which this challenge has been made, has to
take steps within 20 business days to resolve
the matter. Furthermore, if the information
has been removed, the credit bureau must
inform you and the credit provider and all
parties to whom the information on their
system has been reported during the last 20
business days.

Step 4 - Identify and understand the
major black listings

a. Defaults
Defaults occur when a debtor has not met
his or her legal obligations or failed to make
a payment according to the agreement. The
number and record of defaults or non-payment
now reflect in your account history.
The credit bureaus call this “adverse”
information and are allowed to ref lect this
information for a period of one year on your credit
record if it remains unresolved, uncontested and
unpaid. However, information about how you
make your payments, meaning your “payment
profile” may be retained for a period of five years.
b. Judgments
A judgment is a court order granted against you
by a specific creditor when you have not paid
your debt. A legal process is followed before a
judgment is issued. The judgment is held on the
system of the credit bureau for five years and
then is automatically removed.

c. Administration orders (Notices)
An administration order application is lodged
in the Magistrates court and is designed for
individuals who could not be sequestrated
and may be placed under debt counseling. A
third party may be appointed to manage your
debt payments. Although not a typical “black
listing” it has the same effect.

Your financial reputation is harmfully affected
by any bad listings or black listings on your
profile. If these listings are not removed from
your credit profile you will technically be frozen
out of the credit-granting world. No one will
give you credit, and even if they do it will be
given at crippling interest rates.

d. Debt counseling
Debt counseling is when you are unable to pay your
debt and you apply for relief under the National
Credit Act. Through a process, a debt counsellor is
appointed on your behalf to arrange a distribution
of a certain amount of your funds to your debtors
over a period of time. Certain debt may be excluded
from the debt counselling process.

There are three types of key listings that could
make your credit record “black” namely:

e. Sequestration
If you are unable to meet all your payments

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June 2013 SA Real Estate Investor

and can show that the distribution of your
assets, once liquidated, will be to the benefit of
creditors, your estate can be sequestrated. Until
your estate is rehabilitated, you will be unable
to enter into any debt agreement, unless done
with the consent of your liquidator. Information
on administration orders may be retained for
the earlier of ten years or until the order has
been rescinded by a court. The same applies to
information on sequestration.

Step 5 – Identify which listings to look
for and attend to first?
Knowing how bad these listings are and which
ones apply to you is a crucial step towards
clearing your name. Apart from incorrect entries
against your name, the most crucial listings are:
Payment profile problems
These are the easiest of all to repair as it will
depend entirely on yourself and how you can
manage the payments and conduct of your
accounts. It may take you however up to 6
months to repair and restore a negative payment
profile and during this 6 months of repair –
make sure that you pay all your accounts on or
before the due date, never miss any payment,
not even your Telkom account and if possible
– pay your accounts a few days earlier as it
sometimes takes a few days for your payment to
be processed from one department to the other.
Administration orders (Notices)
It is fairly easy to rescind an administration order
either by yourself with the help of a Law Clinic,
Legal Aid or the assistance of the Clerk of the
Court; or with the assistance of an attorney.
More often than not, it is found that debt
administration is the type of solution to lower
income groups and usually these consumers
don’t have assets or don’t have sufficient assets
for sequestration to be a viable solution to them.
b. Judgments
Judgments are one of the most severe listings. It is
the official decision of the court at the completion
of the lawsuit. It generally stipulates a monetary
reward to the winner. Enforcement of a judgment
is left in the hands of the parties of the lawsuit.
Don’t miss part two of ‘how to get off the
blacklist’ in our July edition

RESOURCES
Budget Fitness
Gerstner Attorneys
www.reimag.co.za