Debt Collection in South Africa – Some Useful Tips

Debt problems in South Africa have steadily grown over the years. In fact, the demand for debt collection companies is quite high, triggered by the burgeoning number of debtors who have run away beyond their liability.

The Prescription Act in South Africa creates different time frames for specific types of debts. For instance, there are certain debts with a prescription period of just 3 years and this period will commence when the amount becomes due. On the other hand, larger debts such as a mortgage, have a period of 30 years.

The law stops collectors from harassing the debtor and they are required to function within legally set boundaries. What the creditors need to do is to seek help from a legitimate debt collector. Unfortunately, there are some agencies who have given debt collectors a bad name, and you will do well to steer clear of them.

The onus of ensuring responsible credit is on the National Debt Collector. It is for the regulator to advise debt collectors, banks and consumers on guidelines for debt.

The arrival of a debt collector is bad news for the debtors. Once the problem is passed on to a debt collector, they become liable for additional fees as well. Anyone struggling with their payment schedule must begin to think of ways to fix the problem as any delay will only exacerbate the problem.

It is in the interest of people who receive the creditor’s letter to respond immediately. There can still be negotiation for better payment terms. Responsible creditors may even advise the recipient to seek help with debt counselling.

Debt collectors in South Africa work closely with attorneys, which enables them to easily initiate legal action against the erring debtors who fail to respond to the mails or other modes of contact. This is usually done as a last resort when other attempts to collect the debt fail.