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The abuse of Emolument Attachment Orders (“EAO”) as a means of collecting debt has been under the spotlight for some time. As a result, the amendments to the Magistrates Court Act 1944 and the Magistrate Court Rules 2010 came into operation on 1 August 2018.
These amendments were necessary as there was insufficient control by way of judicial oversight over the granting of EAO’s. As a consequence thereof low income earners were losing their salaries to unscrupulous micro-lenders.
Parties can no longer consent to the jurisdiction of a court other than one which is in the area where the defendant resides or is employed.
The creditor now has a greater onus to obtain the current information of the debtor when applying for judgement by consent. Only Magistrates can issue EAO’s after determining that it is just and equitable.
Application needs to be set down on a court roll and notice of that date must be given to all parties concerned inter alia other creditors with EAO’s, the defendant and his/her employer.
As a result of the amendments to the Rules, the amount to be paid in instalments under all EAO’s is limited to 25% of the debtor’s basic salary pro rata.
Once the Magistrate has authorised an instalment order and an EAO, then it is necessary for the plaintiff to notify the Debtor, his or her employer and all his or her creditors with EAO’s to come to Court on a date specified on the form to give reasons why the application should not be made an order of the Court.
As a result of the recent amendments, debtors are better protected against abuse by micro-lenders.
The introduction of judicial oversight will ensure that debtors are not prejudiced by the granting of EAO’s and that such orders are only granted when it is just and equitable.
Bailey Haynes Inc. Debt Attorneys in Cape Town provide expert legal advice to both debtors and creditors.
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