Can the bank repossess my car without a court order?

No. In South Africa a credit provider cannot simply come and take your financed vehicle because you have fallen behind. It needs either your genuine consent, in the form of a voluntary surrender, or an order of court authorising the attachment and return of the vehicle. Self-help repossession, where an agent arrives with a tow truck and no court order, is unlawful.

That does not mean the bank cannot get the car. It means there is a process, the process gives you several chances to fix things, and every step of it can be checked.

What the bank has to do first

A vehicle finance agreement is a credit agreement regulated by the National Credit Act 34 of 2005. Before a credit provider can go to court on a defaulting account, it must send you a notice about your default. That notice must tell you that you are in arrears and that you may refer the agreement to a debt counsellor, an alternative dispute resolution agent, the consumer court or an ombud with jurisdiction, so that the parties can try to agree a plan to bring the account up to date.

The notice has to be delivered in the way the Act requires and to the address on record. Courts take this seriously. If the notice was not properly delivered, the enforcement proceedings can be delayed or dismissed.

Only after that notice, and after the period it allows has passed, may the credit provider issue summons. If it obtains judgment and an attachment order, the sheriff of the court, not the bank's agent, is the person who takes the vehicle.

Voluntary surrender: the shortcut with a sting

The National Credit Act allows you to terminate a credit agreement by giving the credit provider written notice and returning the goods. The credit provider then sells the vehicle and gives you a written statement showing the selling price and what is still owing.

Two things people underestimate:

• Vehicles sold out of a repossession or surrender usually fetch well below retail. The shortfall between the sale price and your outstanding balance can be substantial.
• You remain liable for that shortfall. Credit providers do pursue it, and it becomes an ordinary debt that can result in judgment and an emoluments attachment order.

If you receive the statement and you think the vehicle was sold for too little, you can dispute the sale and ask for details of how it was marketed and sold.

What to do if you are behind on your car

1. Do not hide. Ignoring letters guarantees the worst outcome. Ask for a settlement figure and an arrears figure in writing.
2. Ask about reinstatement. The National Credit Act allows a consumer, in most cases, to bring a credit agreement back to life by paying the arrears plus the credit provider's permitted default charges and reasonable enforcement costs, before the goods have been sold. Ask for that amount in writing.
3. Ask for a restructure. Many credit providers will extend the term or capitalise arrears rather than repossess, because a repossession costs them money too.
4. Consider debt review if the problem is across all your accounts and not just the car. See how long debt review takes.
5. Consider selling the car yourself. A private sale at market value almost always beats an auction price, which reduces or removes the shortfall. You will need a settlement quote from the bank and the sale must clear the outstanding balance or you must fund the difference.

If your car is taken without a court order

If a vehicle is removed from your possession without your consent and without a court order, you can bring an urgent application in court, known as a spoliation application, to have possession restored. The court in that application does not decide who owns the car or who is right about the debt. It decides only whether you were in peaceful possession and were deprived of it without a lawful process. If so, the car goes back and the credit provider must then follow the proper route.

Act fast. Urgency matters in these applications and delay weakens your case. Collect evidence immediately: photographs, the tow company name and registration, the names of anyone present, any documents handed to you, and a written record of what was said.

Report the incident to the South African Police Service and to the National Credit Regulator on 0860 627 627. Keep all reference numbers.

Watch out for a "consent" you did not really give

Credit providers sometimes rely on a signed consent to surrender, or on a phone call where the consumer is said to have agreed. Read anything before you sign, and never sign a blank form. If you are asked to sign at the roadside while your car is being loaded, that is not free consent, and it is worth saying so in writing the same day.

Also check whether the person collecting the vehicle is a registered debt collector or a sheriff. A sheriff acts under a court order and carries the documents. Anyone else should be asked to produce the order before you hand over keys.

If judgment has already been granted

A default judgment granted without proper service can often be rescinded, but there are strict time limits and you should get advice quickly. See what happens when a debt prescribes for why judgment debts are treated so differently from ordinary debts.

Free help is available. Legal Aid South Africa on 0800 110 110 can tell you whether you qualify, and our legal aid page explains the process. University law clinics also assist with consumer credit disputes.