What is the Debt Collection Procedure in South Africa? | Legal Articles


Need Legal Advice?

No Matter What Your Bind We Can Help You



Legal Articles

What is the Debt Collection Procedure in South Africa?

There is a lot of uncertainty about how the debt collection procedure in the South African courts works.

Our courts have certain requirements with regards to debt collection in South Africa. These can be broken down into different stages.

In this article our attorneys explain the nine stages for you.

debt collection attorneys south africa

  1. Is the National Credit Act Applicable?

The first step is to confirm whether the creditor is registered with the NCA and therefore if the National Credit Act is applicable.

If the NCA is applicable, in terms of Section 129 of the NCA, the creditor or their attorneys must forward a letter via registered mail.

In accordance with the NCA, the Section 129 letter must include the following:

  1. a debt counsellor
  2. an alternative dispute resolution agent
  3. a consumer court
  4. an Ombud with jurisdiction

Following no response to the Section 129 letter, the creditor is entitled to proceed with legal action. A summons is then issued and served.

  1. Delivering the Summons

The summons must be issued at a court in the same jurisdiction as the debtor’s residential or employment address or their place of business.

Once the summons is delivered to the clerk or registrar, they will then issue the summons and the creditor will receive their case number.

Issuing may take up to a couple of weeks, however, the waiting period for summons issuing differs between the various courts of South Africa.

If the summons is not in accordance with the respective court’s rules, the clerk or registrar will indicate where the summons does not meet the court’s guidelines.

Once the summons has been issued and you have received it, both the original and a copy of each debtor being sued must be sent to the sheriff within the jurisdiction of the debtor’s address. Following this and as per the creditor / creditor’s attorney’s instructions, the sheriff will serve the summons on the debtor.

It’s imperative that the summons is served on the debtor personally by the sheriff as the court will not grant an order for a default judgement if the debtor has not been duly informed or if the sheriff cannot show that they attempted to personally serve the debtor.

In the case where the debtor has left the given address, the creditor will not be able to proceed with the request for default judgement until debtor’s address had been traced by tracing agent and updated.

  1. Time period for response

Once the summons has been served on the debtor, they have 10 working days to serve and file their notice of intention to defend the legal action being instituted.

The creditor is entitled to proceed with a request for default judgement if the debtor fails to serve and file its notice of intention to defend within the prescribed 10-day period.

If the debtor does file their notice to defend within 10 days, the debtor must serve and file their plea within 20 business days from the date of notice of intention to defend being served.

However, if the debtor further fails to file a plea within the prescribed time, the creditor must then serve and file a notice of bar. This means that the debtor has 5 working days from when the notice of bar was served to serve and file its plea.

This acts as a final warning for the debtor to serve and file its plea. If they fail to do so may entitle the creditor to proceed with their request for a default judgement.

  1. Default Judgment Procedure

To minimise any errors, most courts require the following documents to be filed in the court before a request for default judgement court order can be granted:

  • The original letter of demand with original registered mail receipt from the post office,
  • Track and Trace report from the South African Post Office (https://www.postoffice.co.za/Tools/tracktrace.html),
  • Original summons and particulars of claim,
  • All attachments to the summons for example, the credit agreement, must be available to court of file 5 days prior to the application being heard,
  • In the event of any original documents not being available, the creditor must file an affidavit in terms of Rule 12 (6) & (6A) to explain that the original document is lost,
  • Original return of service by the sheriff,
  • Request for default judgment in triplicate,

Matters must generally be given a date which is provided by the clerk of the court. This is because some of the Magistrate court’s procedures for default judgements are heard in an open court.

Magistrate courts also follow another method which requires that applications for default judgements be filed at the clerk of the court and taken to the Magistrate chambers (rooms or offices of the Magistrate).

On a weekly basis, the creditor must follow up to confirm whether the default judgement order has been granted.

If there is a query about the application, it will be given to the creditor in writing to amend.

In the case of open court, the creditor will be verbally informed of the query that needs to be amended.

  1. Warrant of Execution

Once the default judgement has been granted, the creditor is then able to deliver its warrant of execution to be executed by the sheriff against the debtor’s property 

A warrant of execution is not issued over the counter and therefore the said warrant must be filed and then issued. This means that the creditor will have to follow up with the clerk of the court and check whether the warrant has been issued. Once it has, the creditor can collect.

  1. Attaching Movable Property

Once issued, the warrant of execution will then be delivered to a sheriff within the jurisdiction of the debtor where movable property can be attached.

The sheriff will then report back with their findings:

  1. There was no property to attach,
  2. The debtor is not the legal owner of the property held at the premises,
  3. a list (inventory) of the movable property attached with an estimated value thereof to be sold on an auction,
  4. The debtor is not present at the premises and has left the given address (return of non-service).

If the debtor has left the given address, a tracing agent must be employed to obtain the debtor’s new address, place of business or employment address.

If the value of the debtor’s movable property covers the outstanding balances to be recovered, the creditor may proceed with an auction to sell the attached movables.

Immovable property amounting to the balances to be recovered can also be auctioned off. The Deeds Office must be contacted to trace the immovable property registered in the debtor’s name.

  1. No Movable/Immovable Property to Attach

In the case where a debtor has no immovable or movable property to sell to settle the debt, the creditor may proceed with a financial enquiry in court.

Known as a Section 65A (1) Notice, the debtor must then appear in court with their financial documents to prove their income and expenses. This court date will be provided to the creditor by the clerk of the court.

Please note that if the creditor is aware that the debtor has no assets to attach and only earns a monthly income, it is not necessary to first proceed with a warrant of execution before the financial enquiry.

The creditor must first send a registered mail letter, in terms on Section 65A (2), wherein the debtor is informed of the creditor’s intention to proceed with the said financial enquiry. This must be done before notice to appear in court can be issued.

However, if the warrant of execution has been personally served on the debtor then it is not necessary to notify the debtor of the financial enquiry via letter.

The notice to appear must be served to the debtor in person, if the debtor cannot be found then a tracing agent must be appointed.

  1. Magistrate Court Appearance

On the day of court and before the Magistrate begins their court roll for the day, both the creditor and debtor must attend and complete the required income and expenses form.

The form will either be given to the clerk of the court or handed up in court by the creditor.

Following this, the court will then decide if the repayment will be made according to the debtor’s affordability.

Once the prescribed income and expenses form is completed, the agreed amount is discussed between the creditor and debtor and is usually in monthly instalments.

If the debt due exceeds the debtor’s income, the court cannot create an order for repayment. The court will then postpose the for a few months to review the debtor’s financial position.

The creditor is entitled to have a warrant of arrest issued for the debtor if they do not appear at their court date. This is also valid to all dates postponed for reviews.

  1. Emolument Attachment Order

If the debtor fails to make the repayments, the creditor is then entitled to proceed with an emolument attachment order (EAO).

An Emolument Attachment Order is an order that deducts the monthly instalment due to the creditor from the debtor’s salary. This is done by the debtor’s employer who is known in as the “Garnishee”.

This procedure works as follows:

  • The creditor may request that the EAO be issued during the financial enquiry,
  • Monthly instalments cannot exceed 25% of the debtor’s basic salary,
  • The order must be served on the creditor, employee as well as all other creditors with an EAO against the debtor. The return date for the EAO must be authorised as final by a court of law,
  • This gives relevant parties time to raise their objections before the return date,
  • If there are no objections, the EAO will be authorised by the relevant court and again served on all the respected parties (creditor, employee of the debtor and any other creditors with an EAO against the debtor).

Van Deventer & Van Deventer Incorporated – Debt Collection Attorneys in Johannesburg and Cape Town

The debt collection procedure can be tricky and must be followed step by step.

Van Deventer & Van Deventer Incorporated are attorneys specialising in property law and debt collection. Contact us for professional and efficient civil litigation and debt collection.

Contact us to set up an appointment.

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


Get the latest updates in your email box automatically.