Debt Collection is one of the most complained about businesses. Only a few people have positive experiences dealing with debt collectors. Debt collections is a type of financial account that have been sent to a third party to collect from the debtor their debts.

Debt collectors are companies who collect unpaid debts for other businesses/companies. The original company with which you created the debt, assigns the account to the collection agency. This occurs when the debtor missed several payments and the company with which the debtor created the debt cannot reach the debtor or is unable to get the debtor to pay their unpaid debt. It is usually more cost-effective for companies to hire debt collectors than to continue to spend their own resources pursuing payment on accounts.

The Debt Collectors may send the debtor a letter of Demand before issuing a Summons, and this is normally an indicator of the seriousness of the matter.

The letter of Demand usually states what the claim is for and how much is being claimed. The letter of demand indicates a period of 10 days in which repayment arrangements can be made and it may be sent via registered post or it may be delivered by hand.

Normally the summons will only be issued when the debtor fails to make repayment arrangement with the collectors. After the Summons was served personally on the debtor and the debtor fails to make arrangements within the 10 days that is awarded to them, the collectors may proceed in issuing Default judgment.

A Warrant of execution against property is issued once judgment has been                                                                                                         obtained against the debtor. The sheriff can attach movable goods and remove them to a place of storage until the assets can be sold on a public auction (sale in execution), however this route is not always the most favorable as the debtor may not have enough movable assets to cover the capital amount outstanding, the legal costs and the costs of the attachment of the movable assets.

The Section 65 proceedings and the emolument attachment order is proceedings in the Magistrates Court into the financial affairs of the debtor. This procedure allows the court insight into the debtor’s financial affairs. The court in most cases grants an emolument attachment order authorizing the debtor’s employer to deduct a fixed amount from his/her salary at the end of each month until the debt is paid in full.

Once all the above mentioned processes have been exhausted, the warrant of execution against immovable property is the next step. This application is not simple and in the event that the warrant of execution against the immovable property of the debtor is not satisfying you will have to bring an application for sequestration against the debtor and the sheriff will have to provide a nulla bona return of service as an act of insolvency.

This is a short explanation on the collection process. It is recommended that as soon as you receive a letter of demand to make repayment arrangements as this may save you a lot of money and does not harm your credit record.