Are you worried about unpaid debts harming the financial liquidity of your business? Get help from Greyvensteins Incorporated to make sure your debtors pay their dues. Debt collection is legal in South Africa, and it refers to the process of collecting an outstanding debt owed by an individual or a business.
What is the process of debt collection in South Africa?
The first step Greyvensteins Incorporated takes to recover bad debt on your behalf is to give the debtor a courtesy call. Our attorneys use this call to inform your debtor that they have been handed over to attorneys and allow them to make immediate payment without incurring legal fees.
The second step taken by your Greyvensteins attorney applies if the debtor is not able to make immediate payment of the full amount outstanding. Your attorney requests the debtor to sign Aknowldgemen of Debt which is a legal and binding document in which:
- The debtor acknowledges they are indebted and confirms they do not have a valid defence
- The debtor confirms the address on the Acknowledge of Debt as their main residential address, permitting the Sheriff to affix the summons to the door of the residence.
- The debtor agrees to the jurisdiction of whatever court is named in the AOD.
- The debtor agrees to be liable for legal costs at an attorney-client scale.
- The debtor relinquishes 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”.
The third step taken by your attorney is to send the debtor a letter of demand. A letter of demand is sent if the debtor fails to pay the debt as per the terms agreed upon during the courtesy call, and interest is added from the date on which the letter is sent.
Should the debtor still fail to pay the outstanding amount, Greyvensteins Incorporated will issue a summons against them. The debtor has ten days to respond and advise if they intend to defend the matter. If the debtor fails to serve notice of intent to defend within ten days Greyvensteins will apply for judgement.
The last step is to issue a warrant of execution against the debtor’s property which gives the sheriff a warrant to attach the movable property at the debtor’s premises. In cases where the movable property does not suffice to cover the debt, the debtor is called to court to give reasons why they cannot pay the debt, after which the court may order their employer to deduct payments from their salary or attach funds from their savings or investment accounts.
How much does it cost to get a Letter of Demand?
It is more affordable than you think. Greyvensteins Incorporated prioritizes the financial well being of your business and are committed to creating tailored legal solutions that are within your reach. Please contact us to speak to one of our expert business attorneys in Gqeberha to find out about the cost of obtaining a letter of demand to recover bad debt. If all else fails, the court may make an order to attach the debtor’s immovable property.
There is a monstrous consumer debt problem in South Africa, with many individuals and companies falling into arrears. Debt collection and recovery are essential to the financial health of your business. Contact Greyvensteins Incorporated for assistance with debt collection and recovery in Gqeberha, Cape Town or Johannesburg.