Added Legal Value Newsletter Volume 1 Number 8

17 August 2008

Debt collecting

The face of debt collecting has changed over the last few years. But basics stay the same. A principle we have learned over fourteen years of debt collecting is that the creditor who makes the most noise, is more likely to be in the mind of the debtor when the debtor decides who to pay.

Stay in the mind of your debtors by maintaining contact. Negotiating and insist on payment by a certain date. Confirm the agreed date in writing. Don’t bark without a bite. If the debtor does not pay as promised, follow up with a letter of demand ‹and comply with the National Credit Act.› Then, if there’s still not proper payment, hand the matter over for action.

The National Credit Act hurdle

In terms of section 129 and 130 of the Act, no legal steps may be taken against a debtor in a credit agreement unless certain proposals have been made to the debtor.

The proposals are that the debtor refers the matter to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date.

Sequestration and Liquidation as a debt collecting tool

In many instances this may be killing a flee with a sledgehammer, but for those debt collecting nuts that are hard to crack, a hammer is more likely to do the job.

We have built up a reputation over the years as experts in the Insolvency field and among other things, regularly provide advice and present lectures to colleagues on the practical aspects of sequestration and liquidation. We also annually update the Legal Education and Development Insolvency notes of the Law Society of South Africa.

We gladly answer any of your questions in this regard.

Please e–mail us if you need some information on the process or any other aspect.

Regards

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