So, you need to clear your name?
Imagine having default judgment (a Court ruling entered against party X, due to failure to defend a claim that was initiated by party Y) entered against your name as a result of a summons that you did not even receive. Imagine your application for credit being rejected as a result of a judgment against your name. Situations like these are unfortunately more common than one thinks. We have been dealing with a number of these cases lately, so we thought we would explain a little of the background to this and how to try and solve it.
Essentially, a default judgment is attached to your name when a Court makes a finding that you are liable for a debt, either if you do not defend the claim or during a case if you fail to act in accordance with the Court Rules. Credit bureaux then register these judgments and log it to your specific credit profile, in effect blacklisting you. South African law does however allow you to approach the Court and request that the judgment be removed. This is done by way of an application for Rescission of Judgment.
There are three grounds on which one may rescind a judgment in the Magistrates Court:
- If you have a defence to the claim that you did not raise (because, for example you did not receive the Summons). In these cases, you need to apply for the judgment to be rescinded within twenty (20) days of finding out about it;
- If the judgment debt has been paid within a reasonable time (of finding out about the judgment);
- If the judgment creditor (person/company who obtained the judgment) gives his/her consent to the rescission.
Less common is when judgment is obtained against you in the High Court. Unfortunately, in this case, only option 1 above will apply. The removal of a High Court judgment is not an automatic right even when you have settled the debt or the judgment creditor consented to such removal. If you do not bring an application to remove the judgment, it will appear on your credit profile for a mandatory period of five (5) years (as per the National Credit Act).
When a Court decides whether or not to grant a rescission it is likely to look at several factors including:
- Whether you applied for Rescission of Judgment within twenty (20) days of finding out about the judgment (and if not, whether there was an excuse for the delay);
- Whether you have paid the debt;
- Whether the judgment creditor (person/company who obtained the judgment) has consented to the rescission;
- Whether you were in wilful default i.e. you received the Summons but ignored it or whether you never received the Summons in the first place;
- Whether the judgment was granted by default (a ruling entered against party X, due to failure to defend a claim that was initiated by party Y) or after trial (in which case it will not be listed by the credit bureau).
It is imperative to understand that merely applying for Rescission of Judgment will not always result in it being granted. Should your rescission be granted, remember to inform the various credit bureaux in order for them to remove the judgment from your credit profile.