Debt Collection Process in South Africa. Know your rights.

Step 1 Courtesy Call

After receipt of initial instructions, one of our attorneys will contact the debtor and explain that they have been formally handed over to attorneys. We clarify that it is a courtesy call and that, should they pay immediately, they will not be liable for legal costs. However, should they fail to make payment, we will hold them accountable for legal costs.

If the debtor cannot pay the amount in one instalment, we request that they sign an Acknowledgement of Debt. This document sets out exactly when the debtor is to make payment. If the debtor does not make payment in terms of the AOD, we proceed with legal action.

Benefits of an AOD includes:

  1. The debtor acknowledges to be indebted and confirms that he does not have any valid defence;
  2. The debtor agrees to be liable for legal costs on an attorney-client scale, which is a higher scale as provided for in the act;
  3. The debtor chooses the address on the AOD as his domicilium address. This means that that the sheriff can affix the summons to the door of the residence. This is very helpful when the debtor might have moved or refused to open for the sheriff.
  4. The debtor agrees to the jurisdiction of the Magistrate’s Court as opposed to the High Court, limiting legal fees;
  5. The debtor also renounces the benefits of the legal exceptions such as “excussion”, “division”, “cession of action”, “non causa debiti”, “no value received”, “revision of accounts” and “de duobus vel pluribus reis debendi”.

Step 2 Letter of Demand

Should the debtor fail to make payment as verbally agreed, we send a letter of demand. In terms of the Act, you are allowed to add interest from the date on which the letter of demand is sent.

Step 3 Summons

If the debtor still fails to pay, we proceed with summons against them. The sheriff will serve the summons on the debtor, whereafter they have 10 days to respond on whether they intend to defend the matter. If they fail to serve a notice of intention to defend within 10 days, we will apply for judgment.

Step 4 Execution

Upon receipt of judgement, we will issue a warrant of execution against the debtor’s property. The sheriff will go to the debtor’s premises and attach his movable property.

If the movable property is insufficient to cover the debt, we proceed with a Section 65 financial enquiry. The debtor is called to court to give reasons why the debt cannot be paid. The court can make an order that the employer deduct an amount from the debtor’s salary (emoluments attachment order) and pay it towards his debt. If the debtor has money in a saving or investment account, we can also attach same.

If the aforementioned is still not enough to satisfy the debt, we can proceed with an application to sell the debtor’s immovable property.