DEBT RECOVERY

Where a party (the Respondent) does not meet their contractual requirements or any other legal obligation and therefore owes money to an Applicant, however, they decline the presumption that they acted in breach of their obligations, a dispute has arisen. In such a dispute, debt recovery and enforcement actions may be engaged in to recover the monies owed.

Necessary steps need to be taken by the Respondent, including, Pre-Action steps under the Uniform Civil Rules 2020 (SA) the issuing of a Letter of Demand, filing the matter with the courts and finally going through court proceeding. The courts will determine upon order whether the debt is owed (in favour of the Applicant) or is not an actionable debt (in favour or the respondent). It is vital that if you are a debtor (who owes the money) that you attend court and respond to the creditor’s (to whom the money is owed) claim. If the debtor is absent throughout proceedings, the creditor can obtain a default judgement against the debtor and proceed to enforcement action.

What avenues of action are afforded to an applicant in pursuit of their court ordered monies?

The process of recovering debt ordered by the court is called, ‘Enforcement Proceedings’. Once there is a judgement debt ordered, these types of proceedings help to enforce the payment of the debt.

Firstly, upon application, the debtor will receive an investigation summons. During this process, the judgement debtor will be questioned regarding their financial position and what avenues are payment are most realistic. In this hearing, the debtor can generally not question to the validity of the debt and only answer as to their ability to repay the debt. The Enforcement Proceedings must not be issued more than 6 years after the initial judgement was handed down.

Additionally, an Enforcement Proceeding is an effective way of recovering debt as it places a significant burden on the judgement debtor. This is because if the judgement debtor is summonsed to an Enforcement Proceeding by the courts, and do not comply with the conditions of this order, they can be found to be in contempt of court. Thus, making an Enforcement Proceeding, as a last resort of debt recovery, quite successful in safeguarding the creditor’s interests and rights.

There are additional escalating steps of enforcement proceedings including obtaining a warrant for arrest.

If you need assistance in debt collection proceedings or you are involved in enforcement action, Straits Lawyers are here to help. We are now offering online services in both English and Chinese.

Straits Lawyers is evolving! With our recent growth and development, we have expanded and are excited to announce the launch of our new name HandO Lawyers. Stand by for the new age of legal representation brought to you by HandO!

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.