30 Jan Judgments Removal Is Key to Restoring Your Financial Freedom

Posted at 10:24h in Latest News by

Default and voluntary judgments can be cause for your financial demise – judgments can impair your access to credit, and the rental opportunities you can access, heighten insurance premiums, and limit access to roles in the finance industry. Removing judgments can be key to restoring a good credit history, which can open up doors to the world of credit once more.

Judgments occur when you fail to make repayments three times. Under the National Credit Act (NCA), you must be served a letter of demand and then served a summons to court – where if you don’t properly file a motion for rescission, you can voluntarily agree to a judgment, which could lead to voluntary sequestration – or not show up and be issued a default judgment, and so possibly an involuntary sequestration or garnishee order.

This post discusses the ways you can obtain judgment removal, both in rescission and satisfaction of judgments.

How to Clear Paid-Up Judgments

If you’ve paid off a judgment, you can file to have it removed from your credit report. Usually, judgments stay on your credit report for five years after they’re paid off.

To get a judgment removed from your credit report, you should ask your creditor to issue you a letter stating that you have paid your debts and any interest or fees due, called a Satisfaction of Judgment letter. Then, you must submit the letter to the court and request that the judgment, whether voluntary or default, be removed from your credit report.

How to Remove and/or Rescind a Judgment

First, let’s have a look at how the timeline of your debts affects whether a judgment can be rescinded.

After you’ve defaulted, your creditors may send you a letter of demand (section 129 of the NCA) after you’ve not paid. This letter can serve as a summons to court if you choose not to undergo debt review. You’ll have to go to consumer court. If you choose not to, you’ll be issued a default judgment. This can lead to two avenues:

  • You’re issued a garnishee order/ emoluments attachment order
  • You’re involuntarily sequestrated (declared insolvent under Insolvency Act)

Usually, the court chooses to go the sequestration route – if your liabilities exceed your assets. You’ll be placed under provisional sequestration – which can be voluntary (after a voluntary judgment) or involuntary (under a default judgment).

Let Cape Town Legal Consultants clear judgments from your credit record. Achieve financial freedom!

You only have 20 days to defend against a judgment placed against you. Some reasons a default judgment can be entered against you include:

  • You didn’t file a notice to defend yourself.
  • You must submit a plea – if you don’t, a judgment can be issued to you five days after your court summons.

Grounds on Which a Judgment Can Be Set Aside

If the judgment or summons was filed improperly, you can file a motion to have it set aside on the following grounds:

  • The summons was improperly served – you didn’t receive the letter of demand
  • It’s incompliant with Magistrate’s Court rules
  • Your creditor doesn’t have good cause
  • The letter of demand wasn’t compliant with sections 129 and 130 of the NCA
  • There was no reckless credit investigation by the court
  • The credit agreement was unlawful
  • Maximum interest rate provisions weren’t adhered to
  • Administrative and default charges are not compliant with tariff regulations
  • Accidental oversight, a mistake, or that you were neglected in the case
  • Your creditors defrauded you or misrepresented case facts
  • The judgment has been released or satisfied
  • Usually, if creditors properly prove their case, provisional sequestration is ordered. Then, you and your attorney will be issued a court timetable of proceedings and a date of return.

You have until the date of return to motion a rescission, but the provisional sequestration will be considered first. This is because of a ruling established in the case of Cryoliving Ltd. vs. Farzee.

To file to rescind a default judgment (in the case that your creditor doesn’t agree to rescind it), you’ll need to set out an affidavit stating why you failed to defend the judgment and what your good cause (bona fide) is for legitimately failing to defend yourself.

The Legal Requirements for Judgment Rescission

To apply for the recission of a judgment, certain legal requirements must be met. These include:

  • Providing good cause for why you failed to defend yourself
  • The application must be made within a reasonable time
  • You may have to pay the costs associated with the application for recession
  • You must not have delayed the application for rescission unreasonably

After you’ve proven your case and the court has ruled in your favour, you must obtain a 74Q rescission of judgment order. You can submit this to the bureaus and ask them to remove the judgment from your credit report.

Once the judgment has been removed from your credit report, you’re free to make repayments as initially agreed and begin rebuilding a positive repayment history, leading you to financial freedom and a positive credit report.

If you would like to obtain a satisfaction of judgment or rescission order, contact Cape Town Legal Consultants. Our experienced team of attorneys would love to help you on your way to financial freedom!