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Our attorneys explain the Debt collection procedure in South Africa

Many people are unsure of how the debt collection procedure in the South African courts works.

As a result, many people suffer prejudice due to a delay in the proceedings and in some instances the claim becomes prescribed (expired).

Our courts have specific requirements regarding debt collection which can be explained in different stages.

Legal Debt Collection Procedure in South Africa - attorneys in Cape Town

STAGE 1: Is the National Credit Act Applicable?

The first step is to confirm whether the National Credit Act (the NCA) is applicable (is the creditor registered at the NCA).

In most cases, the NCA is applicable and to prevent any delays the creditor or its attorneys of record must send a letter via registered mail in terms of Section 129 of the NCA. The Section 129 letter must include the following to be in accordance with the NCA:

  1. a debt counsellor
  2. an alternative dispute resolution agent
  3. a consumer court
  4. an Ombud with jurisdiction

If the debtor does not respond to the Section 129 letter the creditor is entitled to proceed with legal action (summons issued and served).

STAGE 2: Delivering the Summons

The summons must be issued at the court within the jurisdiction (area) of the debtor’s residential address, employment address or place of business.

Once the summons has been delivered to the clerk / registrar, the clerk / registrar will issue the summons which means you will receive a case number.

The waiting period for the summons to be issued differs from the respective courts of South Africa, which can take up to a couple of weeks.

Should the clerk / registrar find that your summons is not in accordance with the respective court’s rules, the clerk / registrar will indicate where the summons is not in line with the said court’s rules.

After you have received your issued summons, the original and a copy for each debtor being sued must be delivered to the sheriff within the jurisdiction (area) of the debtor’s address. The sheriff will serve the summons on the debtor as per the creditor / attorney’s instructions. 

The summons must be served personally on the debtor as the court will not grant an order for default judgment if the debtor has not duly informed thereof or if the sheriff does not show that he/she attempted to personally serve on the debtor. If the debtor has left the given address the creditor will not be able to proceed with the request for default judgment until the current address of the debtor has been obtained by appointing a tracing agency to obtain the current address.

STAGE 3: Time period for response

Once the sheriff has successfully served the summons on the debtor (s), the debtor has 10 (ten) business days to serve and file its notice of intention to defend the legal action being instituted.

If the debtor fails to serve and file its notice of intention to defend within the prescribed period of 10 (ten) business days, the creditor is entitled to proceed with a request for default judgement.

If the debtor did file its notice to defend within the prescribed time period, the debtor must serve and file its plea within 20 business day from date of notice of intend to defend being served.

If the debtor further fails to serve and file its plea within the prescribed period, the creditor must serve and file a notice of bar. This notice means that the debtor must serve and file its plea within 5 (five) business days from when the notice of bar was served. This serves as a final warning for the debtor to serve and file its plea, failing to do so may will entitle the creditor to proceed with a request for default judgement.

STAGE 4: Default Judgement Procedure

The majority of courts require the following documents to be filed in the court file to minimise any errors for a request for default judgment court order to be granted:

  1. Original letter of demand with original registered mail receipt from the post office,
  2. Track and Trace report from the South African Post Office (this is done on their website),
  3. Original summons and particulars of claim,
  4. All attachments to the summons for example, the credit agreement, must be available to hand up in court of file 5 days prior to the application being heard,
  5. In the event of any original documents not being available, the creditor must file an affidavit in terms of Rule 12 (6) & (6A) to explain that the original document is lost,
  6. Original return of service by the sheriff,
  7. Request for default judgment in triplicate.

Some Magistrate court procedures for default judgments are heard in an open court, which means the matter must be set down on a date provided by the clerk of the court.

The other method some of the Magistrate courts follow is as per the old rules where the application for default judgment will be filed at the clerk of the court and taken to the Magistrate chambers (rooms/offices of the Magistrate).

The creditor must then follow up on a weekly basis to confirm whether the default judgment order has been granted. If the Magistrate has a query on the application this will be given in writing to the creditor to amend accordingly. If the matter is in open court the creditor will be verbally informed of any queries that need to be amended.

STAGE 5: Warrant of Execution

Once the default judgment order has been granted, the creditor may proceed and deliver its warrant of execution against the debtor’s property to be executed by the sheriff.

The warrant of execution is not issued over the counter with the clerk of the court; therefore, the said warrant must be filed to be issued. The creditor will then again have to follow up with the clerk of the court whether the warrant has been issued and collected once it has been issued.

STAGE 6: Attaching Movable Property

The issued warrant of execution will then be delivered to the sheriff within the jurisdiction (area) of the premises of the debtor where movable property can be attached. The sheriff’s return will state what their findings were which either can be:

  1. that there was no property to attach,
  2. the debtor is not the legal owner of the property held at the premises,
  3. a list (inventory) of the movable property attached with an estimated value thereof to be sold on an auction,
  4. The debtor is not present at the premises and has left the given address (return of non-service).

In the event of the debtor not being present at the given address, a tracing agency will have to be appointed to obtain the current residential, place of business or employment address of the debtor.

If the value of the movable property as per the sheriff’s inventory is enough for all outstanding balances to be recovered, the creditor may proceed with an auction to sell all the attached movables.

In the event of an immovable property, the auction process is also followed. Immovable property registered in the debtor’s name can be traced by way of a Deeds Office Search.

STAGE 7: When there is no movable/immovable property to attach

If the debtor has no property (movable or immovable) to sell to settle the debt the creditor may proceed with a financial enquiry in court. This is known as a Section 65A (1) Notice for the debtor to appear in the relevant court together with all his/her financial documents as proof of all income and expenses. The appearance date will be provided to the creditor by the clerk of the court.

It is not necessary to first proceed with a warrant of execution before the creditor may proceed with the financial enquiry. This usually occurs when the creditor is aware that there is no prospects of success to proceed with the warrant of execution (the debtor has no assets, and only earn a monthly salary).

Before the notice to appear in court can be issued the creditor must first send a registered mail letter in terms on Section 65A (2) wherein the debtor is informed of the creditor’s intention to proceed with the said financial enquiry. Only when the warrant of execution has been personally served on the debtor it is not necessary to proceed with the afore-mentioned letter to notify the debtor.

The notice to appear for the financial enquiry must be personally served on the debtor, alternatively a tracing agency must be appointed to obtain the current whereabouts of the debtor.

STAGE 8: Court Appearance

On the appearance date the creditor and the debtor will attend to complete the required income and expenses form before the Magistrate will start with the court roll for the day. The completed form will be given to the clerk of the court, alternatively handed up in court by the creditor. The court will then decide if the order for repayment will be made according to the affordability of the debtor. The agreed amount is usually in monthly instalments discussed between the creditor and the debtor when the prescribed income and expenses form is completed.

If the debtor cannot afford to repay the debt due to the expenses exceeding the income, the court cannot make an order for repayment. The case will then be postponed for a couple of months to review the financial position of the debtor. Should the court be able to make an order, the case will be postponed for a few months to review the debtor’s financial position.

Should the debtor fail to show up at court on the appearance date, the creditor will be entitled to have a warrant for his/her arrest issued at the clerk of the court. This is also applicable to all postponed dated for reviews.

STAGE 9: Emolument Attachment Order

In many instances the debtor fails to make payment in terms of the court order made during the financial enquiry. The creditor is then entitled to proceed with an emolument attachment order (EAO). This order is when the monthly instalment due to the creditor is deducted from the debtor’s salary by the debtor’s employer (garnishee).

The EAO procedure works as follows:

  • During the financial enquiry the creditor may request that the EAO be issued;
  • The monthly instalment cannot be more than 25% of the debtor’s basic salary;
  • The EAO must be served on the creditor, employee and all other creditor’s with an EAO against the debtor with a return date for the EAO to be authorised as final by a court of law;
  • If any of the relevant parties have any objections against the EAO they have time to raise their objections on or before the return date.
  • Should there be no objections the EAO will be authorised by the relevant court and must again be served on the creditor, employee of the debtor and any other creditors with an EAO against the debtor.

Bailey Haynes Inc. – Legal Debt Collection Cape Town

The debt collection procedure can in many instances be a delayed process, but with an end result of successful recovery. 

Contact our attorneys in Cape Town, for professional legal advice and assistance with your debt collection.


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