Fight against home auction

ARGUMENT: QUESTION ON WHETHER BANK CAN TAKE HOUSE IF ONE IS UNDER DEBT REVIEW

- Ciaran Ryan

The High Court in Cape Town this week threw out an application by a George homeowner to stop Standard Bank's home loan guarantee company — SB Guarantee - from transferring his property to a new owner after it was sold at a public auction in February.

The case was booted on the grounds of urgency, but the matter is far from over as the homeowner's legal team weighs its options.

At issue is whether a bank can refuse to allow you to go under debt review so it can proceed to sell your house at public auction.

Debt review, in theory, freezes the legal enforcement process.

Standard Bank argued in its papers that it should not be joined to the case because it exited the picture in 2019 when the borrower's debt was settled by an associate company called SB Guarantee.

On this basis, it argued the homeowner was not entitled to enter debt review.

The National Credit Act (NCA) allows over-indebted consumers to go under debt review through a registered debt counsellor, which places a moratorium on legal enforcement actions by creditors.

However, the right to apply for debt review falls away as soon as the bank serves a summons on the consumer.