Debt has increased 3 fold.

[marco]

11 Years ago my business went belly up and I had a personnel bank loan of R50 000.00. Not having an income, I was ordered by the court to pay R50.00 pm.

This debt was sold to a debt collecting company some years ago and they are now getting aggro with me to start repaying more. They say that I now owe R150 000.00.

Can someone tell me:
1. Can the principal debt of R50k increase to R150k?
2. Can they get a new judgment against me as I had one for this already?

Thank you

[Dave A]

They're probably looking for a new order as opposed to a new judgement.

Have you been paying R50.00 per month all this time?

[marco]

I have been paying R50 all this time. By the time I got my new business up and running, the amount was R100 000.00 and stayed that for some years. Now that it has been sold, the new "owners" of my debt have pushed it up to R150 000.00.

My interpretation of the NCA is that the interest plus costs cannot be more than the principal debt. That is why the bank kept it at double the principal debt.

[Dave A]

I think it was the Ursory Act that was saving you on the principal vs interest issue. The debt was incurred before the NCA, so has limited application.

The thing to bear in mind is the R50 order was made because of your financial circumstances at the time. The creditor can ask for a review of your financial circumstances from time to time and have the monthly amount payable each month amended.

I'd ask for a detailed statement as to how the balance owing was arrived at and get a lawyer to run over the details.

I'm curious though - How did you expect this to ever end?

[marco]

Well Dave, I stuck my head in the sand and thought it may "go away".
It nearly did as the previous owners of my bad dept did consider to write it off but then sold it to the new owners.

I have been to the bank to get details but they told me it is not on their system anymore. I did repay R24 000.00 over 3 months and I can't get details on this.

I also wish to differ with you on your answer that this was before the NCA.
This act was written over 2 years with all the amendments made.
There is no start date mentioned on the NCA.

[Dave A]

I also wish to differ with you on your answer that this was before the NCA.
This act was written over 2 years with all the amendments made.
There is no start date mentioned on the NCA.

I stuck to "limited application" because I'm not sure exactly what portions would apply here. Not only is it a fairly complicated Act, implementation was brought about in stages by issue of regulations and the devil could be lying somewhere in the detail. I'm particularly wary of the period and that the debt was to a bank. Bank loan and surety agreements were particularly diabolical then. Banks are pretty good at making sure the paper covers themselves rather well.

Well Dave, I stuck my head in the sand and thought it may "go away".

Entirely understandable when you're out of options.

I've been under similar circumstances myself - at about the same time too. But I think there were a heck of a lot of us that suddenly found the world could be a very rough place in '97/8.

I have been to the bank to get details but they told me it is not on their system anymore. I did repay R24 000.00 over 3 months and I can't get details on this.

That might be a pony worth riding. At the time little more was needed than a certificate claiming the balance due. Perhaps now they have to show how they arrived at the claimed current balance owed.

Strategically, I think it critical that you get a lawyer acting for you - at least to examine the exact legalities and pump out a few letters. It also shows you're not going to be a pushover and they may even go for a settlement offer if things look like they might get messy. I somehow doubt they paid full price for the debt in the first place, so there might be scope.

And as I said earlier, the devil is often in the details...

[marco]

Thanks Dave. There is no way this co. can give me any details as to my principal debt, interest, amount I paid back or any info prior to there taking over my debt. Thank the lord that they don't even know that my wife was the co-signer on the loan as the business we have now is on her name and as are all our assets.
I think they are taking a fat chance here.
I am prepared to pay what I owe but not the amount they quote.