Civil Litigation and Debt Collection

Do not ignore the problem and hope it goes away. It won't. The good thing about a negative credit report is that it can be fixed. Find out what is considered bad and good for your credit and how to recover from your credit mistakes.

Order your credit report and review it carefully. Make a list of your debts and prioritise them from most important to least important. Cut out all unnecessary expenses and use the extra cash to pay off your debts one by one. Negotiate or consolidate your debt by talking to your credit/service providers about a rate reduction.

Never ignore letters of demands or summonses to appear in court for non-payment. Phone the credit/service provider and try and adapt your repayment plan. Stick to your plan and be disciplined—do not spend what you can’t afford to repay and look at your Credit Report monthly to track your improvement.

A notice is a legal action that has been taken against you after you have failed to pay a debt or outstanding account. Notices include administration orders, provisional sequestrations, sequestrations and rehabilitation orders. Administration orders remain on your profile for 5 years, rehabilitation orders remain for 5 years and sequestrations remain for 5 years if no rehabilitation order is granted.

10. What if I cannot repay my debts - what are the next steps?
When a consumer cannot afford to pay their debts, they have the right to approach a debt counsellor for assistance. (see National Credit Act) The counsellor will help the consumer to restructure or rearrange their debt payments if the consumer is deemed to be overindebted-this arrangement can be made an order of court.

Debt counsellors must be registered with the National Credit Regulator and charge for their services. Interest will also continue to be applied to the debt.

Consumers should sure that they understand exactly what will happen under counselling and should know upfront what the fees or charges will be.Once a consumer has signed for debt counselling, this is noted on the credit bureau’s consumer profile and he/she is not allowed to obtain further credit until the counselling process is finalized or withdrawn.

It is a 3 digit number that is created representing your overall credit behavior. It includes score ranges that will help you understand your score.

A consumer credit report will be updated with new information provided over time by credit/service providers. Your TransUnion Credit Score is calculated based on the latest information contained in a credit report at the time the score is requested, so a score generated a month ago will probably be the same as one calculated today.

If you find yourself unable to manage your debt, you may apply for an administration order in the Magistrates Court if your debt does not exceed R50 000. The magistrate examines your financial position and appoints an administrator to whom you make regular payments.

These payments are divided proportionately among the various stores and banks to which you may owe money. An administration order remains on your credit report for a period of 5 years or until it has been rescinded.

They have the right to contact you for the payment of a debt.
They have the right to charge the prescribed fees for the work done in collecting a debt.

The right to obtain legal advice before signing anything. In the legal world your signature on a document, for instance an acknowledgement of debt, can have serious financial consequences. 

To be treated with dignity at all times. 
The right to confidentiality. 
The right not to be contacted before 6 in the morning or after 9 in the evening, or on a Sunday. 
The right not to be harassed, humiliated, embarrassed or threatened. 
To receive a statement should you request one free of charge once every six months