Debt Collecting- What you need to know

Since September 22, 1995 we no longer see any debtors in prison for failing to pay debts.

Recent developments seem to have placed debtors in a very favourable position, making South Africa seem like the best country in which to owe anyone money.

Because legislation and the common law has developed to a large extent to protect innocent debtors from exploitation by unscrupulous creditors it is important for creditors to know what is available to them.





It is very important to distinguish the types of debt we find as it determines the route you take towards obtaining a judgment against the debtor. It is only when one has a judgment in one's favour when the means of recovery herein become available.

Let's look at our different forms of debt:

1. Liquid Debt

2. Debt based on a Liquid Document.


"Now aren't the two things one and the same?" you may ask. Well- the answer is that category 2 falls under category 1, but category  does not fall under category 2. I shall understand if this confuses you without using even a word in Latin, but it is actually easy to explain.

1. Liquid Debt: This kind of debt mostly arise from business transactions. It is the price for goods bought, the fee for services rendered and of course- the rent due in respect of one's tenancy in the building in which you work or reside.

The amount that is owed does not still need to be determined, but can usually be seen on a price tag, in an invoice or in a written contract.

Legal proceedings to recover this type of debt are instituted with a summons. The proceedings that follow thereafter give the Defendant/ Debtor the opportunity to deny his/ her indebtedness and to give the grounds on which such denial is based.

If the Defendant wishes to do nothing about the matter within the period of ten working days from delivery of the summons to him/ her the Creditor/ Plaintiff can request that the Court grants judgment by default in his/ her favour.

If the Defendant does, in fact, defend the matter the matter may very likely be finalised after the conclusion of a trial. This can easily take about 6 months and in some cases more than a year (depending on factors such as the amount of time spent on settlement negotiations, when the attorney's bill gets paid, the availability of court dates and such...)


2. Debt based on a Liquid Document

Examples of a liquid document are the following: An Acknowledgement of Debt (AOD), A cheque, and Undertaking to Pay and a Promissory Note.

 A creditor in possession of a document like the above has more security for the settlement of the debt and can avail himself of the remedy called Provisional Sentence. This type of legal proceedings are much faster than the normal proceedings instituted by a summons because the summons in this case calls upon the Defendant to appear in court on a determined date to dispute the fact that it was indeed he/she or an agent of his/ her that has signed the document or the authenticity of the document itself.

The court date is also much closer than in the case with a summons- where there are a number of documents that needs to be exchanged between parties before the matter is deemed ready for trial.


Once judgment has been obtained it has to be executed. This means that if the debtor does not pay out his/ her own accord the money (and at least a portion of the legal costs) due is to be obtained in one of the following manners:

1. Execution against movables: Given the price of storage costs charged by the Sheriff these days I shall only recommend this in the event of a debt being R 10 000.00 or more. If the debtor's movable seized are at at a value equal to the debt one can proceed with the removal thereof. The Sheriff usually gives a rough estimation of the value of goods he lists for execution and you can use the inventory supplied by him to consider the viability of removal and sale.

A number of days (not less than 15 days after attachment according to the Magistrates' Court Rules ) pass with the goods held in storage by the Sheriff and part of the proceeds are deducted to pay this before the Creditor receives his part. If the proceeds from the sale are not enough the creditor shall even have to pay in to cover the storage costs.


2. Execution against immovable property: If the Sheriff cannot find anything movable to attach then you can go for the house- if the debtor owns one...

A writ for attachment of movables can be obtained from the Registrar or Clerk of the Court and require no evidence other than the fact that you have a judgment. To attach immovable property however one needs to get an order from a judiciary officer- a judge or magistrate as circumstances require- to authorise the Creditor to attache the property for sale.

It is important to bear in mind, however, that a lot of properties are mortgaged. If such a sale is to take place the Bank- as Bondholder- has the right to be paid first from the sale- in full- before the Creditor gets his share. It is thus understandable that you will first need to know to what extent the property is mortgaged before you embark on the attachment of a debtor's immovable property.


3. Emoluments Attachment Orders: You may know from the news of late that judicial oversight is now required when getting these orders. When one applies for this order one applies to be authorised to take monthly payments from a debtor's salary to settle the debt. A Magistrate needs to have sufficient information on a debtor's income and expenses in order to determine the monthly amount to be deducted.  

4. Garnishee Orders: "Is this not the thing in 3 above?"
No, it is not. Not all debtors work for an employer. Still- they may have people owing them money. The application to attach these debts are a bit easier than with Emoluments Attachment Orders and the debtor does not even need to be notified of the application beforehand.


5. Sequestration: The High Court has actually made it clear that a sequestration should not be used for the enforcement of a debt. Still- if a debtor has no cash, but lots of earthly possessions- this is your last option. Because this is usually a very course of action it is deemed advisable to reserve this for debts of R 50 000.00 or more. The law may say a debt of at least R 100.00 is sufficient, but I can assure you that the cost of the application itself is never this much.

Something to bear in mind when sequestrating a debtor or at least trying to is that the Court is not only concerned with you, but with other Creditors as well and it would grant the order for sequestration only when it is convinced that doing so would be in the best interests of all creditors concerned.


A last thought on debt recovery is that we really have to be careful with whom we do business. It is no use to sue "men of straw" after all.