By MWANGI MUIRURI
Personal finance experts are unanimous that if you borrow, you cannot escape the responsibility of paying the debt.
In the event of default you could come face-to-face with auctioneers.
But the way some auctioneers operate has been a mystery and many victims have lived to rue the day they met.
Mr Steve Juma, a lawyer and the secretary-general of the Kenya National Society of Professional Auctioneers admits there are many rogue practitioners.
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The law requires that a debtor be treated decently. |
He says there are four forms of auction execution — court decrees (where there is a court order), rent, repossession, and recovery of charged properties (collateral).
The law requires that a debtor be treated decently "since falling into debt is not criminal. And you cannot be served through electronic media or a mobile phone."
He says that any auctioneer visiting you must identify himself to your satisfaction.
In an event where the auctioneer is effecting a court order, he is supposed to on the first visit take stock of the goods to be attached, ascertain their status and cost them.
"It is then that he will prepare a proclamation and leave you with a copy; which is a notice of intent to repossess within seven days. In the first visit, the auctioneer is not supposed to carry the goods, neither are you supposed to move the goods to another physical location," he says.
This notice is grace period in which you can seek a court injunction to stop repossession, get means to pay up or indulge with the creditor for a leave of auction.
Grace period
Moving the goods or disposing them off within the grace period is illegal and is punishable by law.
If after the grace period you will not have attained a leave of auction, the auctioneer will proceed to carry off the items in the proclamation.
The auctioneer will then advertise to sell off the goods in a prominent daily newspaper within a further seven days.
"This process gives a total of 14 days to reorganise yourself and salvage your items," Juma says.
In case of rent arrears recovery, an auctioneer will give you 14 days to pay up but will nevertheless take inventory on your assets, cost them and attach them as due for auction.
"After expiry of the duration, the attached items will be advertised for sale and disposed within seven days," Juma says.
This gives you a leeway of 21 days to salvage your goods.
In repossession of items bought on credit, Juma says that the creditor must be having statutory powers of sale.
"The law does not recognise auctioneer being contracted to pursue debts accrued through individual agreements," he says.
Notice for attachment of assets matures after seven days upon auctioneer’s visit after which repossession follows and eventual sale after seven days of an advertisement.
Should you decide to dodge the auctioneer by locking your house or getting violent, a court order can be procured to give permission of forceful repossession under supervision from the nearest police station.
In collateral recovery, the financier will first give you 90 days to sort yourself out.
"After expiry of the notice, the auctioneer will issue you with 45 days of the collateral being officially attached upon which you cannot dispose it off in any way," Juma says.
After the period, you will have a further 14 days of sorting yourself up hence in total summing to 149 days.
The humane part of the process is that, if goods repossessed are oversold at the auction, you are entitled to receiving the excess amount but minus the auctioneers fees.
But should the value of goods sold not clear your debt, more instructions can be issued to seize more property from you and if none is available, you can be committed to civil jail all the way to being declared bankrupt.
The auctioneer is only supposed to execute his work only between 6 am and 6pm on weekdays and between 6 am and 12 noon on Saturdays.
"No auctioneer should visit your premises at any other hour in these two cases and on Sundays and any gazetted public holiday," he says.
Public auctions
Another thing to note is that, in all cases you can salvage your items at the auction as long as it is before the fall of the hammer.
"If the hammer goes down, the ownership of the goods automatically reverts to the bidder. If they were many items, since a sale is an item by item, you can salvage the rest as long as you pay the full amount plus auctioneers fees," he says.
All public auctions cannot be rescheduled from the place advertised and should always start after 10.30 am to give you one more chance of salvaging your properties.
