Getting people to pay their accounts (credit card, clothes or an account for services rendered) is a tedious task and is often attempted without much success. No business can afford to ignore accounts owed, nor have them on the books for extended periods of time.
But what can be done about it? The best answer - call your Attorney.
- There is a legal procedure available to recover outstanding debts. You need to provide your Attorney with:
- All the information you know about the Debtor,
- Full names,
- As much detail as possible on either their residential or work address,
- The date or period in which the services were rendered or the goods were supplied to the Debtor,
- The reason for your claim, which we call the “cause of action”,
- Any written agreement between you and the Debtor,
- Any invoices issued or cheques,
- It is also very useful to provide us with any written correspondence between you and the Debtor that concerns the payment of the account.
Once we have enough information, we start the procedure. First, we serve upon the Debtor a letter of demand. The letter of demand states:
- How much is owed
- Who owes it and to whom it is owed to
- Why the money is owed
- Payment options available
- When the payment is due
Legal proceedings will commence upon the failure of the Debtor to pay within the given time period; and most importantly informs the Debtor of their rights.
If the Debtor fails to pay within the given time period, the letter of demand is followed by a Summons. As discussed in previous articles, the Summons is issued in a Court with jurisdiction over the Debtor or area in which the claim arose, and is served upon the Debtor by the Sheriff. Then three things can happen;
- If the Debtor fails to pay or defend the Summons, a Default Judgement may be applied for;
- If the Debtor defends the Summons, the Creditor may file an application for Summary Judgement in which the Creditor explains that there is no real defence to the action and the filing of a defence is merely to delay the proceedings. If granted the action will not go to trial; or
- If the Debtor defends the Summons and the Summary Judgement application is denied, the matter will go to trial.
If at trial the Judgement is granted and the Debtor must “pay back the money,” then the next step is to ensure payment. This is done through a Writ/ Warrant of Execution in terms of which the Court grants permission for the attachment of the movable property of the Debtor by the sheriff to be sold off at an auction. Another option is an Emoluments Attachment Order or Garnishee Order, in terms of which the Court attaches the Debtor’s income and the debt is paid off by monthly instalments directly from the Debtor’s salary or wages.
That is a brief overview of the procedure we will follow on your behalf to collect your debt. These are the proceedings in general and may vary from case to case. Please consult your Attorney.
Steyn, L. (2015, 7 August). Lawyers in a debt collection loophole. Retrieved 23 February, 2016, from http://mg.co.za/article/2015-08-06-lawyers-in-debt-collection-loophole
Schoeman Law Inc. (2012, 11 December). Letters of Demand: things to know when chasing debtors. Retrieved 23 February, 2016, from http://www.schoemanlaw.co.za/letters-of-demand-things-to-know-when-chasing-debtors/
Berndt & La Vita Attorneys. (2013, Unknown, Unknown). Debt Recovery. Retrieved 23 February, 2016, from http://www.blvlaw.co.za/debtcollections.html