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Debt Collection

If someone owes you money, but refuses to pay you – what can you do?
Let your attorney assist you.

Naturally you would try to collect the money from the debtor yourself by means of a telephone call or a letter. If this proves unsuccessful, you should instruct your attorney to collect the money on your behalf.

However, you should consider the following :

  • Is the debtor actually aware of the debt?
  • Did he receive your letter?
  • Is he still at the same address?
  • Legal fees and costs.

Your attorney will help you decide whether it is worth instituting a claim or not by weighing up the amount of the claim against the costs which will be incurred in collecting it. The financial position of the debtor will play an important role in this regard. Does the debtor have a steady job? Does he own assets that can be attached? Has the debtor frequently changed his address?

Do not expect miracles if you have lent money to a crook! Check on the credit-worthiness of a person before doing business with him.

Must I take action within a certain period?

Yes, it is imperative that you act as soon as possible. Consult your attorney within two, three or four months after the debtor has neglected to pay, or even sooner, but not later. Many creditors act too late, at which stage the debtor has moved or his financial position has deteriorated because other creditors have already acted against him. Most claims lapse after three years.

What will attorneys do?

An attorney will usually, according to circumstances, proceed immediately with the issue of Summons against a debtor. However, if you would prefer that he first sends a letter of demand to the debtor then he will do so. Be forewarned that many registered letters of demand are simply returned by the Post Office as “unclaimed”. Some debtors do react to a letter of demand from an attorney. Even if the amount of the claim does not justify the issue of Summons, it is often worth your while for your attorney to send a letter of demand.

After the Summons has been served on the debtor your attorney can request judgement and thereafter issue a Warrant of Execution with a view to sufficient of the debtor’s assets being sold in execution in settlement of the debt. If the debtor does not have assets worthy of attachment then your attorney will take steps to have the debtor brought before court for a full inquiry into his financial position. At such an inquiry your attorney will ask the court to issue an order in terms whereof the debtor is obliged to pay your claim in instalments.. The court can also order that the debtor’s employers deduct the instalments from his salary.

Can all the costs be collected from the debtor?

The attorney will always attempt to recover all possible costs from the debtor. All costs will be recoverable if, when granting the debtor credit, you entered into a written agreement in terms of which the debtor would be responsible for “attorney and client” costs, including collection commission, if he were to default in payment. Give this document to your attorney when you consult him.


If the debtor intends repaying the debt promptly, neither he nor you will suffer any loss. Ask your attorney to draw up a document which can be signed by the debtor.

If there is no agreement as set out above whereby the debtor will pay “attorney and client” costs, your attorney will endeavour to get the debtor to agree to accept liability for all legal costs incurred by you, failing which you will be able to recover only a portion of the costs from the debtor.

May I charge interest?

Yes, interest may be charged at the rate prescribed by law (at present 15.5% per annum) from the date on which the debt is due and payable. If no date for payment has been specified, interest may normally be charged only from the date on which the debtor receives the summons.
It is advisable to get the debtor to accept liability for interest at an agreed rate, should the debt not be paid within a certain period.


What about collection agents? Are they attorneys?

An attorney is properly qualified to provide legal services.  By law, only an attorney or advocate is allowed to represent you in court. Collection agents are not qualified attorneys and may not represent you in court. Section 60 of the Magistrates’ Courts Act specifically provides that no one except an attorney may collect fees relating to a collection matter from a debtor.

This means that if a collection agent collects debts on your behalf and attempts to recover any fees from the debtor, he would be contravening the law. Section 83(1) of the Attorneys Act also provides that no person other than an attorney is permitted to practise as such or to pretend that he is a practitioner.

Money which is collected by an attorney is properly protected by law and, in the event of theft, is adequately protected. Attorneys’ fees may be assessed by the court if you feel they are excessive.

Are you a debtor?

If so, you are advised to settle the debt immediately on receipt of a letter of demand or summons, to avoid further costs being incurred.
PLEASE NOTE that if the money has been demanded by a collection agent, you are liable only for the capital and not for any costs. If a collection agent attempts to recover costs from you, see your attorney.

If you are unable to pay the full amount, immediately visit the plaintiff’s attorney (or your own attorney) and offer to repay the debt by means of instalments. If you do not honour your obligation, the plaintiff’s attorney will be entitled to take further action against you, for instance sell your goods in execution and arrange for an inquiry into your financial position to be held by the court.

If you feel that you do not owe the amount claimed, do not simply ignore the summons or document, but visit your attorney within the period stipulated in the summons and let him attend to the matter on your behalf.

Get proper advice!

Whether you are a debtor or a creditor, it is in your own interest to obtain proper legal advice.


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For the information of our clients, we have prepared articles on certain aspects of law that may be of interest. Please note that these are not detailed expositions of the law but are for information and interest only. Please obtain professional advice before you act in any way.