Debt Collection

How the instruction works

Send the invoice, the contract, the statement, and what you have already done to collect. We read those papers before we write to anyone. If the debt is prescribed, disputed on a real defence, or owed by a shell with nothing to attach, we say so. If it is collectable, we agree the scope and the fee, open the file, and you can follow it on Client Login.

• Written instruction. We do not start on a telephone brief alone
• Quote before a letter goes out — and a separate quote before a summons, because court is a different cost
• Recovered funds are paid over once they have cleared in trust. We do not sit on your money
• Collection costs and interest are claimed from the debtor where the contract, the National Credit Act, or a court order allows it. Where they cannot be recovered, you know that before we start
• Once the file is here, you stop chasing. Dual collection compromises the process and the relationship
• A live dispute is not handed over as an undisputed debt. Resolve it, or instruct us on the dispute — do not pretend it is a simple collection

This is not a no-win-no-fee mill dressed as a law firm. If the only honest advice is to write the invoice off, that is the advice. A write-off on your books does not stop a proper collection if you still want the capital recovered, and VAT on a bad-debt write-off is a tax question — raise it with the accountant, not as a reason to keep a dead file open.

Letter of demand & pre-action recovery

Most files end here. A letter on this firm’s letterhead, a date to pay, and a telephone or written file if the debtor will talk. The tone is professional. The next step is stated. We do not harass, and we do not arrive at a door with a van.

• Letter of demand setting out the capital, interest, and costs claimed, with a clear deadline
• Follow-up by email, SMS, and telephone where those channels are proper and the number is the debtor’s
• Negotiated settlement, instalments, or an acknowledgment of debt that can be made an order of court. Once the file is here, arrangements are made through this office — not in a side deal that later collapses the account
• Where the contract allows attorney-and-client costs, those are claimed. Where it does not, we do not invent them
• Interest at the contractual rate, the NCA maximum where that Act applies, or, failing either, the prescribed rate from mora

You do not have to have “tried everything” first. An overdue invoice is enough to instruct. If you still want to trade with the debtor after payment, say so — the letter can leave that door open. Rent that is unpaid at the start of a new period is treated as urgent where eviction may follow; consumer-credit files are not rushed past the Act.

Commercial debts and consumer credit

A trade invoice between companies is not a credit agreement under the National Credit Act. A personal loan, a store account, or a credit facility usually is. The first question on the file is which statute applies, because the letter, the costs, and the court are different.

• Business-to-business: unpaid invoices, professional fees, rent, goods delivered, services rendered
• Sole traders and partnerships — the debtor need not be a company
• Consumer credit: a section 129 notice before any litigation, and no emolument or reckless-credit step the Act does not allow
• Incidental credit and accounts that fall under the Consumer Protection Act — identified, not forced into the wrong notice
• In duplum and prescription checked before anything is claimed as interest
• Debtors outside South Africa: we will say whether a local agent, a foreign attorney, or a letter from this office is the proper next step, and what that costs, before it is done

We collect for companies, professionals, and individuals. We do not take a book of small consumer accounts to be worked as a volume desk.

Section 129 and the National Credit Act

If the debt is a credit agreement under the Act, a summons issued before a proper section 129 notice is a wasted cost. We draw the notice, we serve it in a manner the Act accepts, and we wait the period the Act requires. Section 130 is the gateway to court. We do not skip it to look busy.

• Section 129(1)(a) notice: the debtor’s rights, the amount, and the options — including debt counselling where that is the correct next step
• Proof of delivery that will survive a section 130 challenge
• Where the Act does not apply, a final notice that still states the next step, including a possible bureau listing if that listing would be lawful

A consumer file typically spends longer in pre-action than a commercial invoice. That is compliance, not delay.

Credit-bureau default listing

A listing is a statutory act, not a punishment we invent. The debtor is told that a listing is coming. If payment is not made, a default is loaded with a registered credit bureau. If the law later requires the listing to come off — paid, prescribed, or wrongly loaded — it comes off. We do not leave a listing up because it is convenient.

• Advance notice of an intended default listing
• Loading the listing where the debt and the bureau rules allow it
• Removal when payment, prescription, or a successful dispute requires it

We will not list a disputed account as if it were an admitted default, and we will not list in order to embarrass.

Court action

If the letter is ignored, the question is not “do we sue” as a matter of pride. It is whether a judgment will be worth more than it costs, given what the debtor has. We investigate that — often with the asset-trace desk — before a summons is issued.

• Magistrates’ Court or High Court, according to quantum and the facts
• Simple summons or combined summons where a declaration is required
• Consent to judgment under Magistrates’ Court Rule / section 58, where the debtor signs and the consent is proper
• Default judgment where there is no appearance; a defended action where there is
• Provisional sentence on a liquid document, where the paper supports it

Court fees, sheriff’s fees, and counsel (if the matter needs it) are disbursements. They are quoted. A judgment still gives the debtor time, and enforcement is a further step with a further cost. If the ruling goes the other way, those costs are not coming back. We say that before the summons is signed.

Judgment enforcement

A judgment in your favour is not the money in your account. If you already have an order — from this office or from another — we take the next step only after we know what can actually be attached.

• Warrant of execution against movables, and against immovable property where that is the proper next step
• Section 65 financial enquiry in the Magistrates’ Court
• Emolument attachment, where the National Credit Act and the facts allow it — not as a default
• Garnishee of a debt owed to the judgment debtor
• The sheriff executes. We instruct the sheriff. We do not impersonate one

Enforcement has fees. There is no point paying them to chase a debtor with nothing. If the asset search says the file should stop, it stops.

Debtor tracing

Returned mail, a dead telephone, a registered office that is a shelf company: the file moves to trace before it moves to court. Address, employment, vehicles, property, and directorships are the usual questions. The work sits with Private Investigation where fieldwork is required.

• Data wash of the handover: telephone, email, identity number, and address against current sources
• Credit-bureau and related database traces; a trace alert where the debtor cannot be found quickly and the listing rules allow it
• Last-known address and skip tracing, including a licensed field agent through the investigation desk where the debtor has absconded
• Employment and associated vehicles
• Deeds and company searches; directors and related entities
• A view of whether the debtor is worth suing, before you pay for a summons

Insolvency — companies and individuals

Sometimes the shortest route is not a summons for the debt, but a demand that founds a winding-up or a sequestration. That is a serious step. It is expensive. It is used where the debt is undisputed and the threat of a liquidation or a trustee is more likely to produce payment than a trial.

• Company debtors: a formal demand that can found a liquidation application, and the application itself if the demand is ignored
• Individuals, sole traders, and partners: sequestration where the Insolvency Act and the quantum make it a proper instruction
• A search first — existing liquidations, pending applications, and whether there is an estate worth administering
• If the debtor is already sequestrated or in liquidation, we take the trustee or liquidator’s details and lodge a claim. We do not keep collecting as if the estate did not exist

We will not issue a liquidation application as a collection stunt against a trading company that is merely slow. If the honest purpose is to collect, and the company can pay, a letter and a summons are usually enough. If the company cannot pay, liquidation is for the body of creditors, not a private lever.

Credit control and the client file

Some clients do not want a single bad invoice collected. They want overdue accounts taken as they arise, on a standing instruction, so the trading desk is not also the collections desk. We will look at the credit-control process — when an invoice is chased, when it is handed over, what the terms of trade actually say — and we will run the handovers from there.

• Standing instruction for overdue commercial accounts, on terms we agree
• Review of the credit application and terms of trade — suretyship, interest, domicilium, and collection-cost clauses — before the next invoice goes out
• When to hand over: a 30-day account that is 45 days out; rent as soon as the new period is unpaid; not after the debt has gone quiet for a year
• Status of each matter on Client Login — you do not need to telephone for a progress note

The papers at handover matter. An agreement and a statement are requested before we issue. A spreadsheet of names without contracts is not a file.

What we will not do

Collection is a legal process. The following are refused:

• Doorstep seizure, “lifting” goods, or anything that belongs to a sheriff after judgment
• Harassment, after-hours threats, or contact that would embarrass the debtor in order to extract payment
• A volume book of small consumer debts worked as a mill
• Claiming collection costs or interest the contract and the statute do not allow
• Issuing process we know cannot be enforced, so that the file looks busy
• A section 129 notice that was never properly delivered, followed by a summons we know will be stayed
• A bureau listing of a live dispute, or a listing we then refuse to take down when the law requires it

If the debt is not collectable, the answer from this office is that it is not collectable.