Have you just received a property foreclosure notice in the mail? A terrifying and depressing common reality today – did you know that in South Africa, it is estimated that over 10 000 homes are sold each year for a fraction of their price through the Sheriffs’ court? While it’s certainly not easy trying to keep up with today’s economic climate, it’s no secret that the South African economy has hit hard times, which means that everyone is struggling to pay their bond on time, or to even pay it at all!

How Property Foreclosures Work

Once you fall behind on your bond payments, the bank will begin the property foreclosure proceeding by filing a lawsuit. The bank will take your home away from you and sell it at a Sheriffs’ auction to recoup the outstanding debt that is owed. Unfortunately, property foreclosure is a disheartening act, as not only does the debtor lose their greatest asset, but the property will be sold way under market value. An unfavourable solution to the defaulter, as long as the bank can recoup their money, it really doesn’t matter whether the defaulter walks away with nothing after the auction.

At No More Debt, we deal with property foreclosures every day and understand that no homeowner deliberately sets out to skip their bond payments. But the reality is that life happens and circumstances beyond our control prevent us from our commitments. What’s really important now is not how you got into this mess, but rather how you’re going to get out of it, and that’s what we’re here to help you with.

  1. Acknowledge the Notice and Chat to Your Bank – the biggest mistake that many defaulters make is not responding fast enough due to denial or fear. It must be understood that the reason why you’ve received a notice in the first place is because the bank feels as though you can’t be trusted, and silence will only corroborate their doubt. The first action is to contact the bank and find out what your options are. By acknowledging the notice and exploring options, such as bond restructuring or refinancing, is proof that you’re serious about your loan commitment. If for some reason the bank won’t extend the terms of your loan, then your next option would be to enrol in a debt counselling programme.
  2. Debt Counselling – a successful rehabilitation programme, debt counselling is extremely effective in assisting those who have fallen so deep in debt that they are using as much as 76% of their monthly salary to pay their debts back each month. While this is a positive solution for homeowners who are in arrears of no more than 3 months, this remedy can be rejected by creditors if they believe the debtor is beyond the help of rehabilitation.
  3. Sell Your Property Immediately – last but not least, one sure-fire way to stop property foreclosure is to put your property on the market as quickly as possible, privately or through property sequestration. While this may not be something you want, it is far better than having it repossessed and sold at a Sheriffs’ auction for a fraction of its price.

To learn more about how you can save your home from property foreclosure, contact us at No More Debt today. Accredited as one of the top debt management companies in the southern hemisphere – we can assist you when no-one else can!