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What happens if you don't pay your debt in South Africa?

If you don't pay your debt in South Africa, many companies may get a debt collector to collect a payment from you. This will also negatively affect your credit score and your credit report will note that you have missed a payment. 

Did you know: a missed or late payment can stay on your credit report for up to 7 years!

If you have missed some of your monthly debt repayments for one month, you may be considered over-indebted or in debt distress.

Meerkat—an authorised financial services provider—can help you get back on track with your debt repayments. We can also reduce your monthly debt instalment by up to 50%. How do we do this? With debt review. 

Contact me about debt review >>

What does a debt collector do?

A debt collector is tasked with collecting payments on accounts that customers have defaulted on.

What are debt collectors not allowed to do?

A debt collector cannot be the person who serves you with repossession documents (warrant of execution) for your home or car. Only a Sheriff of the Court can do this. 

A debt collector can also not serve you with a summons (a legal document requesting that you appear in court and that the creditor is suing you). 

They can’t threaten or use force against you or your family. 

Can you go to jail for unpaid debt?

The only time you can go to jail for unpaid debt is under the following circumstances:

  • If you fail to pay child maintenance.
  • You do not pay your SARS tax bill.
  • You fail to appear in court after being issued with a summons.

What's the worst a debt collector can do?

While a debt collector cannot be the one to physically approach you and serve you with court documents, they can follow the process to get a judgement granted against you which could lead to:

  • Repossession of your assets like your home or car.
  • A garnishee order put in place to directly get funds to pay towards your outstanding debt from your salary. 

Don't wait for this to happen. Protect your assets by going under debt review at Meerkat! 

Contact me about debt review >>

The steps a debt collector or creditor has to follow (the debt collection process)

  1. Courtesy call 
    • This is not a required step, but a creditor will likely call you to let you know you’ve missed a payment. 
    Moku Tip: credit bureaus get updated information on your accounts each month, so your credit report will be updated with a late or missed payment usually by the following month. 
  2. Receive a Section 129 Notice (letter of demand) explaining that you have defaulted on the payment of your account. This letter will usually include:
    • The amount you are in arrears for your account. 
    • The different options available to you if you are still unable to keep up with your payments. 

    If you’ve received a Section 129 Notice, take this seriously. This is the last step before legal proceedings can begin against you. 

    Let us call you back to chat about debt review for FREE. 

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  3. If you do not make alternative arrangements to pay your account, the creditor or debt collector can approach a court for a judgement to be handed down. This can happen after 10 days of receiving the Section 129 Notice. 
  4. If the judgement is granted, a Sheriff of the Court can approach you with a summons to appear in court. 
  5. After having received the summons, you can either accept the judgement and pay the outstanding fees due or you can defend it.
  6. If you do not respond to the summons, the court can issue a warrant of execution to repossess your assets or initiate a garnishee order. 

With debt review you can:

  • Stop creditors from harassing you over the phone. 
  • Reduce your monthly debt instalment to something that you can actually afford. We’ve reduced clients' monthly repayments by up to 50%. 
  • Give you the opportunity of a clean credit slate so that you are in a better position to apply for credit after you’ve successfully completed the process!

Contact me about debt review >>

What happens when a summons is issued for debt in South Africa?

You have to appear in court to either accept the judgement or defend that you are unaware of the debt or that it has been prescribed, for example. 

What can you do if a debt collector threatens you?

You can report the debt collector to the ombudsman or go to court. Alternatively, if you want to secure your financial future and stop the harassment of debt collectors and creditors calling you off the hook, you should go under debt review. 

Are debt collectors allowed to call you at work in South Africa?

Debt collectors can and will call you at any time. They can, however, not disclose any information to your employer that could jeopardise your opportunity with your employer. This could change if the court grants a garnishee order.  

Can I ignore debt collectors?

You can ignore their calls, but you can’t ignore your outstanding debt. 

Let us take care of your creditors and your debt. 

Fill out the form today and we’ll answer any questions you have about the process. 

Not ready to bite the bullet yet? Read Debt counselling | Everything you need to know

 

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