The National Credit Act allows you to initiate legal proceedings as little as 20 days after you have defaulted on your Debt. To ensure you do not get Summonsed pay your monthly obligations, if you aren’t able to do so ensure to make an arrangement with the Credit provider.

There are however correct channels that have to be followed, such as:-

  1. Credit Providers have to notify consumers on the intent of legal proceedings prior to doing so, as per Section 129 of the National Credit Act
  2. Consumers must be advised of their right to consult a Debt Counselor,  after which they have 10 days to proceed with assistance for debt review/counselling after which the credit provider can proceed with legal action.

Once a Consumer has successfully applied for Debt Review, no legal action can be taken until such time as a Court and/or Debt Counselor has found the consumer not to be over-indebted.

When the Debt Collection Litigation Process starts, it becomes a costly process. The general process will work in the following manner:-

  1. A Letter of Demand is issued, indicated that the consumer has 10 days in which to repay the debt due. (This can be delivered by hand, via registered post and/or served by the Sheriff of the Court)
  2. The next step will be to Issue a Summons, if below R100 000 the Magistrates Court can issue the summons.  Alternatively above R100 000 the summons will be issued by the Registrar of the High Court.

During the process of the Summons, if it has been Successful granted against the Consumer (Defendant) the following thing happens:-

  1. An Emolument Attachment Order and/or Garnishee Order can be placed on the Consumer’s Salary

Ensure that you are proactive as a Credit Provider to start the process early and a Consumer to keep a healthy payment profile.  To avoid costly channels.