Hard Collections

Hard collections is a term used to describe the collection of bad debt by means of legal action, therefore by issuing either a summons or liquidation/ sequestration application. This process is implemented after soft collection attempts have failed and no prospects of payment being made of the debtor’s own volition is foreseeable.

Once the matter is handed over for hard collection the process is initiated by sending a letter of demand to the identified debtor. This letter generally affords the debtor 10 weekdays to respond, failing which formal legal action is instituted. The process and steps utilized is fully set out below in our FAQ’s and Steps Followed in Legal Action

Hard Collections Questions

1. What is a Summons?

The Summons and particulars of claim are combined into one document called the Combined Summons. In the particulars of claim, the Plaintiff sets out its claim, which includes the cause of action and amount due, among other information.

2. How does service of the Summons work?

The Summons has to be served by the Sheriff of the Court. Service of the Summons can take up to two weeks under normal circumstances. Depending on the agreement that the action is based on, the Summons may in certain circumstances be affixed to the address chosen by the Defendant for service of documents. In other instances, the Summons must be served on the Defendant at his work or home.

3. What is a Notice of Intention to Defend?

Once a person is served with a Summons, he or she has 10 days within which to indicate whether they are intent on defending the action. This is done by giving notice in writing of such intention, this notice being brought to the attention of the Plaintiff’s attorney and the Court.

4. What is Summary Judgment?

Should a matter be defended as described above, the Plaintiff has the Summary Judgment Application to its disposal. This means that the Plaintiff can ask that Judgment be given at this early stage, due to the reason that the Plaintiff is of the belief that the Defendant has no grounds for defending the matter and has only given notice of its intention to defend in order to delay the matter. This Application is brought within 15 days after receipt of the Notice of Intention to Defend.

5. What is a Request for Default Judgment?

Should the Sheriff successfully serve the Summons and the Defendant does not defend the action as described above, the Plaintiff now has the option to ask for Judgment to be given in the absence of the Defendant. This is done by filing a request for same at the Court. A Magistrate will then consider the matter and grant Judgment if he or she is satisfied that the Plaintiff is owed the amount claimed.

6. What are the effects of a Judgment?

Once a Judgment is granted by Court, the Court Officials will provide the data to the Credit Bureaus for listing purposes. The Judgment amount, date and case number will be listed on all Credit Bureaus. The Judgment remains due and owing for a period of 30 years before it prescribes.

7. What is a Warrant?

Once Judgment is granted, the Plaintiff may proceed to issue a Warrant of Execution against the movable goods owned by the Defendant. The Sheriff will then proceed to attend the address that is provided to him or her and demand payment from the Defendant. If the Defendant is unable to make a cash payment upon demand, the Sheriff will attach movable assets which he or she finds on the premises of the Defendant and will draw an inventory of these assets. The assets attached in execution may be sold at public auction and the monies raised will be paid over to the Plaintiff in settlement of the debt.

8. What if the Defendant has no or insufficient movable assets to attach and sell?

Should the movable assets attached by the Sheriff be insufficient to settle the debt, the Plaintiff may proceed with other debt collection methods, such as a Section 65 financial enquiry or an application to declare the Defendant’s immovable property executable.

9. What does it cost to collect a debt by means of legal action?

From issue of summons to obtaining Judgment by Default will cost around R2 500.00 depending on the circumstances of each matter. Vermeulen Attorneys are happy to discuss providing services on the basis of an all-inclusive fee per instruction.

10. What is the approximate time frame of the process, start to finish?

This is very much dependent on various factors, ie the Court location and whether the matter is defended or not. If a matter is undefended, obtaining Judgment should be possible within 6 months. Should the matter however be defended, no estimation is possible and matters may take over a year to finalize.

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Steps taken in Legal Action, undefended:

Step 1

Letter of Demand sent in terms of the relevant legislation is sent to the Debtor;

Step 2
Summons is drafted and issued at Court
Step 3
Summons served on the Defendant by the Sheriff
Step 4
The Defendant now has 10 days for service of his or her Notice of Intention to Defend
Step 5
If no Notice of Intention to Defend is given, Judgment by Default is requested by the Plaintiff
Step 6
Judgment considered by Court, this takes around 6 – 10 weeks
Step 7
Once Judgment is received, a Warrant may be issued, this may be done one day after Judgment has been granted. Some Courts do not issue Warrants over the counter and the actual issue thereof may take a few weeks
Step 8
The Warrant is then delivered to the Sheriff in order for him or her to attend the premises of the Defendant and attach the movable goods that he or she finds at the premises. An inventory is returned to the Plaintiff of the goods so attached
Step 9
The Plaintiff may now request a date for the sale of the goods that have been attached and the goods are then sold at auction
Step 10
Should the amount raised at the Sale in Execution not be sufficient to cover the amount outstanding, costs and interest, further steps like a Section 65 enquiry or the sale of immovable property may be necessary

Steps taken in Legal Action, defended:

Step 1

1. Letter of Demand sent in terms of the relevant legislation is sent to the Debtor

Step 2
Summons is drafted and issued at Court
Step 3
Summons served on the Defendant by the Sheriff
Step 4
The Defendant now has 10 days for service of his or her Notice of Intention to Defend
Step 5
Once a Notice of Intention to Defend is received, the Plaintiff may lodge an Application for Summary Judgment within 15 days
Step 6
The Defendant will set out its defence on Affidavit, which Affidavit is provided to the Plaintiff one day prior to the hearing of the Application. The Plaintiff may decide to either proceed to argue the Application or to give the Defendant leave to defend the action
Step 7
If leave to defend the action is given by either the Court or the Plaintiff, the Defendant is obliged to file its Plea within 20 days
Step 8
The Defendant’s Plea will set out in sufficient particularity what facts it admits, denies and what version of events it will support its defence by
Step 9
Around a month and a half after the Plea is filed, the Plaintiff may apply for a Trial date to be allocated
Step 10
The matter will then be prepared for Trial by the Plaintiff’s Attorneys. This includes consulting with witnesses, indicating which documents will be used at the Trial, requesting documents from the Defendant etcetera. This process may take around 8 weeks, merits dictating
Step 11
At the Trial the matter will be considered by a Magistrate in open Court and after having heard testimony from both parties
Step 12
Judgment may either be granted in favour of the Plaintiff, or the Plaintiff’s case may be dismissed
Step 13
If Judgment is granted, a Warrant may be issued, this may be done one day after Judgment has been granted. Some Courts do not issue Warrants over the counter and the actual issue thereof may take a few weeks
Step 14
The Warrant is then delivered to the Sheriff in order for him or her to attend the premises of the Defendant and attach the movable goods that he or she finds at the premises. An inventory is returned to the Plaintiff of the goods so attached
Step 15
The Plaintiff may now request a date for the sale of the goods that have been attached and the goods are then sold at auction
Step 16
Should the amount raised at the Sale in Execution not be sufficient to cover the amount outstanding, costs and interest, further steps like a Section 65 enquiry or the sale of immovable property may be necessary

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