Guarding Your Assets
Legal Strategies to Safeguard Your Assets from Debt Collectors

Managing arrears and overdue accounts is a necessary function in maintaining the integrity of the credit system. For financial institutions, it is crucial to ensure that outstanding debts are recovered in a fair, lawful, and effective manner – without compromising consumer rights or legal obligations. As a leading law firm in debt recovery, Hammond Pole Attorneys helps bridge this balance between creditor compliance and consumer engagement.

 

Facing debt collection

Many individuals find themselves facing debt collection due to a range of factors, some within their control, others not. 

Unexpected life events such as job loss, illness, or family emergencies can quickly lead to financial strain. In other cases, poor financial planning, excessive credit use, or a lack of understanding about interest rates and repayment obligations contribute to rising debt levels. Once an account falls into arrears, credit providers are lawfully entitled to initiate recovery processes, which may include referring the matter to attorneys or debt collection partners. Regardless of the circumstances, it remains essential for consumers to understand the legal process to engage meaningfully and resolve the matter in a compliant and constructive manner.

 

Understanding what debt collectors can do

While debt collectors cannot act outside the bounds of the law, there are clearly defined steps they can take to pursue repayment.

The process typically begins with an initial courtesy call, providing an opportunity to resolve the outstanding balance amicably and avoid the additional costs associated with formal legal action.

If no resolution is reached, the next step is issuing a letter of demand. This document sets out the amount owed, how it was calculated, and offers the debtor a final opportunity to resolve the matter before court proceedings commence. Creditors may also accrue interest on the outstanding debt from this point onward.  Note that certain debts may prescribe if not actively pursued, unless legally interrupted.

If payment is still not forthcoming, debt collectors can then initiate legal proceedings. A summons is issued and served by the Sheriff of the Court, giving the debtor an opportunity to respond or defend the matter. If the debtor fails to do so, the creditor may obtain a default judgment in their favour.

With a judgment in hand, the creditor can proceed to execution. At this point, debt collectors may:

• Apply for a warrant of execution against movable property and moveable assets (which the Sheriff may seize and sell)
• Pursue Section 65 proceedings, where the court orders debt repayments in instalments or through salary deductions (emoluments attachment orders)
• Seek a Garnishee order to recover funds directly from the debtor’s bank accounts
• As a last resort, and with judicial oversight, apply to sell the debtor’s immovable property (such as a house), particularly if it is the debtor’s primary residence.

Debt collectors are required to follow all applicable laws and court procedures, ensuring recovery efforts remain lawful and compliant

 

Understanding what debt collectors cannot do

In South Africa, debt collectors are bound by strict legal guidelines and may not engage in conduct that infringes upon a debtor’s rights.

Debt collectors may only attach assets with a valid court order. They may not engage in harassment, misrepresenting their authority, or contacting consumers outside reasonable hours (8:00 a.m. to 9:00 p.m.).

Debt collectors may not charge fees beyond those allowed by law or set out in the credit agreement. They must respect the debtor’s right to privacy and may not share account details with third parties. If a debtor is under debt review or has a restructuring agreement in place, it must be honoured—any attempt to bypass it may be unlawful.

 

In conclusion

Debt recovery matters can be challenging, but knowing the process helps ensure it’s handled fairly and lawfully. Hammond Pole Attorneys offers trusted legal support to guide you through each step.