| ACTION |
AIM |
| SEND A LETTER OF DEMAND |
Try to collect payment of the overdue amount yourself. Send a letter of demand on your own letterhead within 30 days of your customer falling 60 days overdue. |
To get the debtor to settle without incurring legal costs. |
Remember to include the following paragraph:
"Unless payment is received within ten days from the date of this letter, we shall be obliged to report your default to Credit Guarantee in terms of our credit insurance policy, where after legal action will be instituted against you without further notice." |
To let your customer know of Credit Guarantee's involvement. |
If you don't receive payment within the time prescribed in your letter of demand, legal action should be instituted. Remember to give Credit GUarantee a copy of the letter of demand. |
Credit Guarantee is kept up to date with the process of all actions you are taking your to mitigate/reduce the loss. |
CONTACT AN ATTORNEY
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For details of attorneys with whom Credit Guarantee has dealt previously, please speak to your claims assessor at Credit Guarantee
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Ask your attorney to contact the defaulting customer personally before issuing a summons |
The attorney may be able to settle at minimum cost. |
Provide your attorney with all the relevant information. This includes:
- Your customer's physical address, postal address, fax and telephone numbers.
- A breakdown of what is owed and the months in which the debt was incurred
- Any documentation such as cheques (RD or otherwise), promissory notes, written acknowledgement of debt or suretyship.
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This information will help your attorney assess your matter.
This will help your attorney decide which procedure to follow.
One option is to apply for provisional sentence, a shorter procedure where a negotiable instrument is involved. |
SUMMONS |
If your customer does not respond to your Final Demand, the next step is to issue a summons. |
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Your attorney will initiate legal proceedings by issuing a summons via the clerk of the court. The court provides a case number and the summons details the particulars of your case to form a cause of action. The sheriff may serve a summons by attaching it to the door of the premises if he is unable to get hold of the defaulting customer (dependant) personally. |
The magistrate's Court has jurisdiction for amounts up to R100 000. However, parties may consent the Magistrate's Court for of a higher amount provided written consent is reached. Consent to the jurisdiction of the Magistrate's Court can be included in your conditions of sale. |
The sheriff will notify your attorney that the summons has been successfully served by issuing a document called a return of service. Where a summons cannot be served, a return of non-service will be handed to your attorney who may have to employ a tracing agency to find the defendant |
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| DEFAULT JUDGEMENT |
Where a summons has been successfully served and the defendant does not respond within five days from the date it was served, your attorney will apply to the court for a default judgment. |
This has the result of any other judgment. |
| SUMMARY JUDGEMENT |
Where the defendant notifies his intention to defend the action, your attorney may apply for summary judgment |
Summary judgment is a process designed to shorten proceedings, particularly where a defence is raised merely to delay the legal process. |
To apply for summary judgment, your attorney must file an affidavit from you. On receiving this, the defendant will ave to file his own affidavit disclosing his reasons for defending the matter. |
The court needs to satisfy itself that the defence is a proper legal one. |
You may not respond to the defendant's affidavit. If the defence is accepted by the court, the mater will go to trial. |
A benefit of the summary judgment process is that the defendant has committed himself under oath and will be bound by his statements when the matter goes to trial. |
| PLEADINGS |
The defendant is entitled to further particulars of your case in order to respond adequately. The defendant then files a plea detailing denial of admission of your particulars of claim and spelling out the facts upon which the defence is based |
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| DISCOVERY OF DOCUMENTS |
Both you and the defendant have the right to request documents in each other's possession. |
These documents - typically invoices and delivery notes - relate to the case and can be used by either side to prove/disprove a case. |
| TRIAL |
The matter will now go to court. The rules of the court dictate that the person who makes the allegation has to prove it. Evidence is led from each side and the court is required to make a decision - either give a judgment or dismiss your action |
If judgment is given, you can now proceed with execution against the defendant. |
| WRIT OF EXECUTION |
Once judgment is awarded in your favour, your attorney will forward a writ of execution to the court. The writ will be handed to the sheriff who will attach the defendant's property and compile an inventory of goods attached. Upon instruction from your attorney, the sheriff will sell the goods by public auction. Both movable and immovable property can be sold in execution. |
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The sheriff may provide a nulla bona return where there is no property to attach. |
This means the debtor does not have enough property to satisfy the judgment |
A financial enquiry in terms of the provisions of section 65 of the Magistrate's Court Act enables your attorney to summon the debtor to appear before the court to enquire into his financial affairs. |
This enquiry will include an investigation into the debtor's monthly expenses, asset's, liabilities and any aspect relevant to his ability to pay. |
