THE PROCESS - When we receive a collection instruction from you, we -
1. Print out your instruction documents and open a file – you will be allocated a reference number beginning with L... and you will be informed of this ref number and confirmation that your instruction was received.
2. Immediately sent a letter of demand to the debtor by email. We give the debtor 2 – 5 days to make payment. So
metimes we need additional information from you before we can send the demand. We will also need payment of our instruction fee (see underneath) if applicable.
3. By default to pay us on demand or enter into a suitable arrangement with us in writing we immediately proceed with the drafting of the summons and to issue same at court. If we need to use a correspondent (in matters where the debtor does not reside within the Pretoria or Pretoria North Magistrate Court, it takes a bit longer) but we do have correspondents in place within the whole of Gauteng, and beyond. Take note that debtors rarely react to letters of demand and the chances that we will receive a payment at this stage is rare.
4. The summons (once issued) is then delivered to the sheriff’s office for the service thereof. Service of the summons, depending on which sheriff’s office has jurisdiction, takes about 7 – 30 days. We do follow up with the sheriffs to find out the status of the matters and on a daily basis. Some sheriffs require up front payment.
5. When the debtor receives this summons (when the summons has been served by the sheriff), he will have 10 court days (public holidays, Saturdays and Sundays excluding) to defend the matter (this rarely happens). Sometimes the debtor will contact us upon receiving the summons to arrange for payment, but not always.
6. If we do not receive a Notice to Defend within the prescribed 10 court days we, without more ado, apply for a default judgement if all documents are in order (originals to be delivered to us) and once we receive this granted judgement, we apply for the warrant of ex*****on against the debtor. The Default Judgement means that the debtor has been listed at all credit bureas and it is marked that a judgement is on his name. The warrant enables the sheriff to proceed and attach the goods of the debtor at his home address.
7. Currently the Pretoria Magistrate Court require us to lodge our requests for judgements and a date is allocated when a magistrate will consider the judgement. We do not appear in court at this stage (although in the Pretoria North court we need to appear). In the Pretoria Court the judgements are considered within a month (give and take) from lodging same.
8. When the default judgement is granted the debtor will be blacklisted at all credit bureaus and the next step is to draft and file the warrant at court to be issued.
9. As soon as the warrant is issued, we deliver same to the sheriff who will then be able to attach the debtor’s goods at his home address (this is usually when we request tracer's to trace the correct home address). Depending on which sheriff has jurisdiction over the attachment and if SAPS assistance is necessary, the attachment can take up to two months.
10 The debtor usually tries to settle the outstanding amount at this stage (when he receive a call from the sheriff or when the sheriff knocks at his door to do the attachment.
11. If the debtor still ignores us after the attachment was done we will request the sheriff to remove the goods and to sell same on ex*****on auction. This does not happen as often, since at this stage the debtor usually came forward and made payment or entered into an agreement with us for repayment.
12 IF at this stage we discover that the debtor really does not possess of ANY ASSETS (movable; immovable or vehicles) we will regroup and either attempt to attach salaries or proceed with debt court proceedings. This however is a last resort and we will have taken a few steps before taking this last resort.
13. The long and the short of our procedure is that we do not take any nonsense from a debtor, we do not listen to excuses and sad stories and we do not call and beg for payment. We do NOT do soft collections. You already did this and therefore you now need someone to proceed FAST AND EFFECTIVELY with a summons to secure payment. We collect the outstanding capital amount, plus interest at the current mora rate of 7% per year (if you have a written agreement stipulating another rate we will take the higher rate) and your legal fees on the attorney and client scale (sometimes we do not have a choice and will need to ask for only party and party costs). We have heard all the excuses from debtors over the past 20 years and we ARE NOT FASED AT ALL. We proceed with summons; default judgement; warrant and ex*****on thereof. If the debtor do not pay, his goods will be sold. Sometimes to process takes very long due to problems and sometimes it is very fast. However, we do not give up.
14. All new instructions can be send to us via email, fax or may be hand delivered or we can arrange collection thereof. We do need from you:
Your particulars on your letterhead in order for us to see exactly who the plaintiff / client is. Is it a company / CC / sole proprietor et cetera. The debtors particulars especially a legible email addresses. Also spesify if the debtor is a person; a company or a CC
Detailed statement indicating the outstanding amount and this statement should begin at zero, please do not send us a statement indicating a balance being brought over (we do need to see how the balance was calculated) and also
for what this amount is outstanding – the invoice would inform us what service was rendered
if there are application forms involved, we will need this as well. If there are applicable emails, you can also forward same to us
If there are whatsapp messages which is important to the matter you can export this and email to us. If there are quotations which were accepted, we will need that as well. Thus, all documentary evidence you have in your possession, must be forwarded to us. This just makes it easier, because we do not have to ask for this afterwards. COSTS - Debts (amount owed to you) under R15 000.00:
1. No legal costs to be paid by you save for a once off instruction fee :
1.1 Debts under R5000.00 – R500.00
1.2 Debts between R5001.00 and R10 000.00 – R850.00
1.3 Debts between R10 001.00 and R15 000.00 – R1250.00
PLUS
Direct expenses of the firm for instance sheriff fees for the service of the summons, sheriff fees for the attachment of assets, tracer fees which varies between R300.00 and R400.00 per successful trace. The instruction fee as mentioned above is payable to us on hand over. Direct expenses will also include copies made by us and appearances in court when needed.
2. A successful trace will be when we receive an address (trace report) and we send the sheriff to serve the summons upon the person at this address and the sheriff indeed find the person at the address provided by the tracer. If the debtor is not found, the tracer is not paid and the matter is referred back for a re- trace or another agency is appointed to oversee the trace.
3. We will, however, strive to recover your capital amount (minus our commission of 15%), your interest (minus our commission) and the costs/expenses paid to us. For instance if you paid sheriff fees to us, we will pay it back to you upon collection of the legal costs from the debtor. The tracer’s fee is only payable if the address furnished by him is correct .
4. In all instances the capital amount is collected first, then the interest and then the legal fees. COSTS - Debts (amount owed to you) above R15 000.00:
1. Regular legal fees apply as per the Magistrate Court tariffs and on the attorney and client scale. If the collection goes ‘according to plan’ ie, it is not defended and the debtor does not hide out, the legal fees will vary between R3000.00 and R8000.00, although this is not guaranteed.
2. The fees may be less or more, depending on how fast we can follow the procedure. The procedure will slow down if the debtor constantly absconds and we need to trace him more than once. This is not a setback at all, we will just take a bit longer to recover the outstanding amounts, but in most cases you are compensated for this further waiting period by way of interest which runs each month.
3. However, we are confident in our extremely good success rate and we do take pride in collecting money fast and effectively. We collect the outstanding capital amount first, then the interest and then your legal fees (which you have already paid to us).
4. The legal fees as taxed will then be paid back to you BUT will be about 5% - 10% less than the amount you paid to us. Thus, if your legal fees were R5000.00, we will most probably pay back to you about R4500.00. We will of course try our best to pay every cent back to you, but this may vary depending on what amount is eventually taxed by the taxing master, but on this scale as between attorney and client, you will get more or less everything back you have spent. And of course, when we recover this from the debtor as well and repay you.
5. We do tax the legal fees at court and that is the amount to be collected and to be paid back to you. It also depends on your agreement with your client (the debtor). If your agreement entitles you to obtain legal costs from the debtor on the scale between attorney and client, then you will get the most costs back. If there is no agreement, then the normal fees to be taxed will be much less since it is taxed on the party and party scale. We do however attempt to get an agreement or court order whereby the higher scale is allocated to you, to ensure you get the most costs back.
6. The current interest rate (mora rate) and from 1 September 2020 is 7% and we will request interest from date of demand. If your agreement with your client (the debtor) makes provision for a higher interest rate, then the higher amount will be used. In all scenario’s we do take a 15% collection commission (which is negotiable if the collection amounts are high ie more than R60 000.00) on amounts (capital and interest) collected by us. IMPORTANT - This applies from the day you hand the matter over to us. For instance, should you hand the matter to us on 15.01.2022 and we send a letter of demand to the debtor OR call him AND the debtor makes payment (also on 15.01.2022) you will be liable to pay to us our 15% collection commission.
2. When several matters are handed over simultaneously we are prepared to negotiate the terms on which we will do your specific collections, for instance we take more commission, but do not ask legal fees. This can be negotiated i beforehand.
3. Thus, we are prepared to negotiate the collection commission beforehand.
