When you owe a bank, financial institution or any other credit grantor money and you are not keeping payments up to date, they will try and make arrangements with you for the outstanding amount. If you fail to keep up with any payment arrangement or they cannot get hold of you, the account will be handed over to a debt collector.

The normal process is for the debt collector to negotiate with the debtor to try and recover the money. They will charge additional fees and interest over and above what you already owe but you can come to a payment arrangement with them.

If this still fails, they will eventually hand the account over to an attorney for collection.

If all other means of recovering the money or coming to an agreement acceptable to the attorney fail, they may begin legal proceedings within 20 days of the consumer being in arrears. This is in terms of the National Credit Act.

The credit provider has to first advise the consumer of their intention to hand them over for legal proceedings before they begin the process. They also have to advise them of their right to seek debt counseling.

If, after another 10 days, the consumer has not initiated debt counseling, the legal process can begin.

If the debtor fails to defend the debt, a difficult and expensive process, an Emolument Attachment Order (EAO) will be placed on the debtor’s salary. Before issuing a summons, a registered letter of demand is sent to the debtor. This is not compulsory but is the standard practice. The letter will state the Magistrates’ Court Act and will describe the nature and purpose of the claim.

The debtor then has a further 10 business days to pay the full outstanding balance. If this is not settled, a summons is issued by the clerk of the Magistrates’ Court for amounts of less than R100 000 or the Registrar of the High Court if the amount exceeds R100 000.

A summons is then served by the sheriff of the court.

The summons will contain the following:

  • The name and address of the Plaintiff
  • The name and address of the Defendant
  • A form of notice of intention to defend
  • A notice advising the Defendant that s/he has ten days to enter a notice to defend.
  • A form of consent to judgment
  • A notice advising defendant of the consequences of his/her failure to obey the order of the court once judgment has been granted against him/her.

Application for Default Judgement

Once the prescribed period for entering a notice to defend has lapsed, the plaintiff will then submit a request for default judgment. This is done in the absence of the defendant as they failed to defend the action.

The judgment is valid for thirty years and allows the plaintiff to use different methods of collection, for example, the Emolument Attachment Order (EAO).

The Application for an Emolument Attachment Order (EAO) or Garnishee Order is an instruction by the court to the employer of the debtor to deduct monies owing in terms of the judgment until the debt is settled.


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