We recently had a client who came to us because he’d received a Section 129 letter regarding his Home Loan [please look at our previous post (on our News page) regarding Section 129 letters]. We placed him under Debt Review and informed the bank of this (by means of a Form 17.1). From this point, this story becomes a bit of a “good news/bad news” comedy show.

BAD NEWS : The bank responded with correspondence stating that the account could not be placed under Debt Review because they (the bank) had already obtained JUDGMENT in their favour against the client. This was bad news for us and the client because the law is very clear that, if judgment HAS been granted on an account, that account cannot be placed under Debt Review. However, IF there was already a Judgment in place, it surely wasn’t necessary for the bank to instruct Attorneys to send a Section 129 letter? As is our standard practice, we requested evidence of the judgment from the bank. We also contacted (telephonically) the Attorneys who had issued the Section 129 letter, and…
GOOD NEWS : The Attorney tells us that no Judgment has been granted as yet, but…
BAD NEWS : The Bank replies via e-mail to say that Judgment has been granted in 2012!
MORE BAD NEWS : The client calls to say that he has now also received a Summons from the Bank’s Attorneys. We ask the client to drop the Summons at our office, which he does. The Summons is dated AFTER the date of our Form 17.1, which is…
GOOD NEWS, because the law is also clear that a creditor cannot proceed with legal action on an account after that account has placed under Debt Review. However, there is still…
BAD NEWS, because there are conflicting stories regarding the legal status of this account. To try and clarify the situation, we called the Bank’s legal department. The Bank’s legal representative confirmed that the Attorneys who had issued the Summons had advised them of the client’s Debt Review application, and that they were reviewing the matter.
GOOD NEWS : The following day, we received a Certificate of Balance from the Bank confirming that the account was now included under Debt Review.
MORE GOOD NEWS : We e-mailed the Attorneys, requesting confirmation that the Summons would be withdrawn ; They confirmed by reply e-mail that the Bank had instructed them to withdraw and close the file.

We have encountered similar situations before, so this is not even an isolated incident. For clients, it makes it very hard to know who to trust, especially when the mighty Bank is telling you one story and the lowly Debt Counsellor is telling you something else. Forgive us if we appear smug, but hopefully this will show that sometimes the Debt Counsellor DOES know what they’re talking about!