The aim of the moratorium is to as far as possible enable people who are in this backlog of unresolved debt counselling matters to retain their homes pending finalization of their unresolved debt counselling applications through consent agreements or court orders.
In terms of the moratorium available for debt counselling, applications lodged up to 30 November 2010, the banks have agreed to not proceed with the termination of debt counselling when permitted under the National Credit Act and enforcement of the credit agreements, but to allow time for the matters to be resolved.
In order to qualify for the moratorium the consumers will have to at present already be making certain minimum payments on their mortgage and other credit agreements and these payments will have to meet or exceed certain levels by 31 March 2010 (if currently below these levels).
Thereafter, provided these payments and other obligations are met, the consumers and their debt counsellors will be allowed time to finalize these matters through consent (utilising the new consent rules for debt restructuring agreed by the industry) or through a court decision, until 30 June 2011.
Consumers (and their debt counsellors) are encouraged to immediately contact their mortgage bank to establish whether they can qualify and what the conditions of the moratorium are to enable them to suspend any termination and enforcement action that may already be under way which could cost them their homes.
In an attempt to regularise the position of part paying consumers under debt review without any consent or court order, the NCR embarked in discussions with the banking industry to find a solution to these cases with a specific emphasis on mortgages.
It recognises the challenges with regard to terminations including different legal interpretations on whether banks could terminate the debt review process and begin the process of attaching consumer's assets while the matter has been placed on the court roll. It further recognise the impact that this is having on consumers' mortgages. In this regard, it has approached the High Court for a declaratory order which it hopes will provide much needed clarity on the issue.
