Absa Bank claims it is owed R1.4 million by a consumer whose outstanding balance on his personal loan was R52 000 at the time of going into debt review seven years ago.
Angelique Ardé, senior reporter for the Sunday Times Money Section, wrote about 58-year-old electrician, Herman van Zyl, who, after losing his job and income, went into debt review with this wife in an attempt to save his house from repossession. Van Zyl and his wife are married in community of property.
Ardé says Absa has not explained how they arrived at that enormous figure but claim that van Zyl owes then R1.4-million in terms of the court order restructuring his debt and debt review.
How it works, is an over indebted person will go to a debt counsellor and submit all their financial information and the debt counsellor will do an assessment.— Angelique Ardé, Senior Reporter for the Money Section in the Sunday Times
Where he or she finds that the consumer is over indebted, the debt counsellor then produces a proposal which then goes back to all the consumer's creditors for approval.— Angelique Ardé, Senior Reporter for the Money Section in the Sunday Times
Very often they don't approval of the proposal to restructure says Ardé. Once it goes to court, it will be made an order of the court when there is consent she adds.
Ardé explains that with van Zyl, there was a proposal and a personal loan restructured and made payable over three hundred and six months at 15.5% a year on his reduced instalments.
There is something wrong here. The bank did not oppose the debt counsellor's proposal to rearrange the consumer's debt.— Angelique Ardé, Senior Reporter for the Money Section in the Sunday Times
Ardé says the bank didn't oppose the proposal because they stood to gain inordinately.
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