Recover debt: “A small debt produces a debtor; a large one, an enemy”

by Recover debt: “A small debt produces a debtor; a large one, an enemy” on 01-04-2018 in News from advertisers

Recover debt: “A small debt produces a debtor; a large one, an enemy”

“Before borrowing money from a friend, decide which you need most.” 

There are so many companies and individuals out there trying to escape their responsibilities of payment of monies due to others. It is distasteful at the least, but people often loan goods or services or even monies to somebody.  They promised to pay you back for services, goods or monies lent.  

You lived up to your side of the bargain but the person who owes you money has broken his/her word. Don’t worry about being nice. Don’t worry about what they think or say about you. The facts are that you did someone a favor and they’ve taking advantage of you. You are no longer friends and nothing you or they do from this point on is going to change that.   

It sounds harsh, but the reality is that they owe the money and promised that they will pay.  They’ll use their selective memory skills to reconstruct the arrangement or the actual amount or terms on which the “agreement to pay” was based. They’ll say you gave them a gift or made an investment or whatever.  

If someone (a debtor) owes you money, you can sue him or her to recover the debt that he or she owes you.  If you had to borrow a few rands here and there, eventually it adds up to “real money” and you being out of pocket and in debt with others.  

I will try and assist you in the understanding of the legal process in the attempts to recover monies or damages due to you. 

Before you are able to proceed, you need to decide which court your action will be dealt with.  To decide which court to go, note the following: 

a. DEBTS NOT EXCEEDING  R 15 000.00: Institute action in the Small Claims Court is where you can have your debtor appear with yourself before the Small Claims Court to try to make him or her return your money. This court makes the claiming process quicker, easier and less expensive. The only down side is that the maximum claims heard in this court is an amount not exceeding R 15 000.00.  b. DEBTS NOT EXCEEDING R 200 000.00. The recovery of debts of up to R 200 000.00 can be instituted in a magistrate’s court in terms of the Magistrates’ Courts Act, 1944.  c. DEBTS starting at R 200 000.00 but not EXCEEDING R 400 000.00.  
You can sue out of the Regional court. 
d. DEBTS OF MORE THAN R 400 000.00. A claim for more than R 400 000.00 must be brought in the appropriate division of the High Court. Below I will explain the procedure for undefended matter and defended matters of which is the same, but only becomes complicated if the matter is defended. 

1.1. The letter of demand You sent the registered letter of demand to the person who owes you the money either by yourself or through an attorney. It is important to note that the letter of demand has to be sent via registered mail and must specify your claim and other facts that would provide clarity as to what the claim is referring to.   

STEP 2: SUMMONS:  If the debtor (person who owes you money), on receipt of your letter denies owing you the money, you will have to proceed with summons.  
2.1. Issuing the summons A summons is a formal documents which is issued against the debtor who refuses to acknowledge claim made by yourself.  

It is important to note, without providing much complex information, that a summons can also be issued against debts or claims which is not based on a specific amount of money. 


2.2. Service of the summons The debtor hereinafter is now known as the Defendant and you will be known as the Plaintiff.  Summons has to be served on the Defendant by the sheriff of the court either:  

 On the Defendant personally or on someone authorized to act on the Defendant’s behalf;  At the Defendant’s residence or place of business to a person apparently not younger than 16 years of age, living or working there;  At the Defendant’s place of employment, to a person apparently not younger than 16 years of age, in authority over the defendant or in charge of the business;  At the domicilium citandi (address for the purpose of serving summons) if the Defendant nominated one when entering into a contract;  At the office of a company (if addressed to a company) to a responsible employee;  By registered post if the Plaintiff has specified it;  By fixing it to the door (or to an outer door if the actual door of the flat, room or office cannot be found) if the person on whom the summons is to be served prevents the sheriff from doing so by keeping the door closed;  By fixing a copy of the summons to the outer principal door of the residence or domicilium citandi of the person on whom the summons is to be served if, after a diligent search, the sheriff cannot find that person or someone apparently over the age of 16 residing or employed there, or, in the case of a company, a responsible employee to accept the summons; 

2.3. Defendant received the Summons. A Defendant served with a summons can: 

 Defend the claim on factual or legal grounds by filling in the notice of intention to defend on the back of the summons and returning it to the clerk of the court;  Admit liability for the amount claimed in the summons by signing the form of consent to judgment on the summons and lodging it with the clerk (or alternatively by signing the consent form on the original summons, which in that case must go back to the clerk);  Admit liability and undertake to pay the amount by instalments in terms of Section 57 of the Magistrates’ Courts Act, 1944;  Pay the amount due, together with the costs you’ve incurred, in which case the matter will be regarded as settled;  Do nothing at all and leave the next step to the plaintiff, in which case the plaintiff will be entitled to obtain judgment by default without giving any further notice to the defendant. 
If the defendant defends the action, the sequence of events will be as follows: 
 Issue of summons;  Notice of the intention to defend;  Plea by defendant;  Plaintiff’s reply to the defendant’s plea (if necessary);  Close of ‘pleadings’, in which further details may be exchanged;  The case comes to trial. 

3.1. Apply for Default Judgment 
After the lapse of 10 days, the Defendant has failed to provide a plea, you then apply to court to have Default Judgment granted.  Until such time the Magistrate provides judgement, the Defendant is still able to provide his plea.   

3.2. What to do after the judgment When judgment is granted against the Defendant, you can proceed with various actions if the Defendant has made no attempt or offer to pay the claim. I will briefly provide some examples below.

3.2.1. Application for Garnishee Order: A garnishee order is an attachment of money against a third party who owes money to the Defendant.  In terms of this application, once you obtain this order, you apply to court to have monies due to the Defendant paid directly to yourselves.   

3.2.2. Emolument attachment order: If the Defendant is employed, you can make an application to obtain an order which will inform the employer of the Defendant to pay a certain portion of the Defendant salary or wages to yourselves.

3.2.3. Section 65 Financial Inquiry: This is an application to court for an enquiry into the financial position of the Defendant. In the hearing the Defendant, under oath, presents oral evidence as to their financial position. At this stage we can then request proof of income; expenses; assets etc. Every time the Defendant defaults in payments, one has to go back to court to order the Defendant to pay. The magistrate will, after inquiring into the income, expenses and assets of the Defendant noting the Defendants financial circumstances and order the debtor to pay the debt in instalments as large as he or she can afford.


3.2.4. Warrant of execution: Attachment of movable property: 
A warrant of execution enforces a judgment or court order when a debtor fails to pay the sum ordered in a judgment. Once a warrant has been issued by the clerk of the court, the sheriff of the court will attach as much of the debtor’s moveable property as is necessary to cover the debt, sell it at a public auction and hand over the proceeds to you. Attachment of immovable property: If the debtor has insufficient moveable property to satisfy the judgment, execution will take place in relation to the immovable property.  An application to court will be done to call the Defendant to court to state why his or her immovable property should not be attached. If the Court orders that the property may be attached, then the sheriff of the court will attach the Defendant’s immovable property and sell it at public auction after the necessary advertisements has been placed in the newspaper. 

I refer to step 2.3. above of undefended matters where in certain cases, the Defendant denies the claim or debt and intends to defend the action. 

STEP 1: DEFENDANT TO DELIVER PLEA Within ten days, the defendant must deliver a plea to you or your attorney within seven days of giving notice of intention to defend your action. The plea is the basis of defense to which the Defendant is denying being liable to the action. 

STEP 2: REPLYING TO THE DEFENDANT After the defendant has delivered a plea, you as the Plaintiff, will be given the opportunity to reply within fifteen days.  A reply is only necessary in some situations.  

STEP 3: THE PRE-TRIAL STAGE The procedures prevailing the pre-trial stage of a case are so extremely methodological and widespread that it is impossible to provide a exhaustive guide to provide assistance. If you wish to chase a matter beyond the stage of summons or plea, an attorney should be considered to attend to it. 

As per step 3 above, it is impossible to provide an effective breakdown herein. 
At the hearing stage, evidence; witnesses etc. are dealt with and the matter is therefore argued in court for a judgment to be made by the presiding officer. 
As seen above, obtaining what is due to you is a long and exhausting process.  It is important to remember that whenever you intend to borrow money you note: “A promise made is a debt unpaid”.  A promise does not guarantee your return. 
(NOTE: this article is for information purposes only. Each case depends on merits of matter and should be consulted with an attorney OR clerk of the court) 

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