Debt Collection and Judgments Overview

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Questions and Answers

What is the primary objective of debt collection?

To initiate legal proceedings against debtors.

To protect the rights of debtors.

To recover payment of a debt owed to a client. (correct)

To negotiate payment plans between debtors and creditors.

Which South African legislation primarily aims to protect consumers from unfair practices by credit providers?

The Debt Collectors Act

The National Credit Act 34 of 2005 (correct)

The Magistrates Court Act

The Consumer Protection Act

During a warrant of execution against a debtor’s property, what is a sheriff authorized to do?

Offer financial advice to the debtor.

Liquidate all of the debtor's assets regardless of their necessity.

Negotiate a repayment plan with the debtor.

Seize and sell only non-essential items of the debtor for payment. (correct)

In Section 65 proceedings, what can a court determine regarding a debtor's finances?

The court may excuse the debtor from paying for non-essential expenses. (D) Signup and view all the answers

Which of the following describes a garnishee application?

A court orders that a third party directly release funds to the creditor. (A) Signup and view all the answers

What is a key aspect of an undertaking under section 57 of the legislation?

The debtor admits liability and agrees to pay in installments. (C) Signup and view all the answers

What is the main difference between a section 57 undertaking and a consent to judgement under section 58?

A consent to judgement admits guilt in a more structured, binding way. (B) Signup and view all the answers

If a debtor fails to uphold their promise in section 57, what action can the court take?

The court can force them to pay the full amount or continue with installments. (C) Signup and view all the answers

In South Africa, what is the primary effect of issuing a summons concerning a debt?

It stops the time limit for collecting the debt and enables the accrual of interest. (B) Signup and view all the answers

When is a creditor entitled to claim interest from a debtor before a summons is issued?

If there's a prior agreement for interest within the contract. (B) Signup and view all the answers

What dictates the interest rate applied after a court judgment is made?

The rate is set by the court at the time of judgment. (D) Signup and view all the answers

According to the provided content, when might collection commission be recovered from the debtor?

If it was explicitly part of the original debt agreement and the charges are legally compliant. (B) Signup and view all the answers

If a debtor does not respond after being served with a summons, what will be requested next?

A request for default judgement. (D) Signup and view all the answers

If the debtor has agreed to pay interest in their contract, which of the following is incorrect before the issuing of summons?

The creditor can claim interest at any rate. (C) Signup and view all the answers

What happens to the interest charged after a judgment is made in court?

Interest continues to accrue on the remaining debt and extra costs, at a legally set rate. (B) Signup and view all the answers

According to the text; which of the following are considered part of the debt collection process?

Letter of demand, summons, request for default judgement, enforcement of judgement, payment is received. (A) Signup and view all the answers

What is the primary purpose of a warrant of execution against property?

To allow the creditor to seize and sell the debtor's assets to cover a debt. (C) Signup and view all the answers

Which individual is responsible for executing a warrant of execution?

The sheriff of the court. (D) Signup and view all the answers

Which of the following assets are protected from attachment under a warrant of execution?

Necessary clothes and bedding of the debtor and their family. (C) Signup and view all the answers

Under what condition can immovable property, such as a house, be attached and sold?

When the sheriff finds no goods to seize (nulla bona return) and only after obtaining a court order. (B) Signup and view all the answers

Who is NOT required to be notified when a creditor seeks to attach immovable property?

The national tax revenue collector. (B) Signup and view all the answers

What is 'nulla bona return' in the context of warrants of execution?

A return of service stating that the sheriff found no goods for attachment. (D) Signup and view all the answers

What is a potential consequence of a nulla bona return for a debtor?

The debtor may be considered insolvent. (D) Signup and view all the answers

What is the purpose of a sale in execution?

To facilitate the auction of seized assets to pay off the debt. (C) Signup and view all the answers

What is the primary function of a 'domicilium citandi et executandi'?

To designate the address for receiving legal documents and notices. (D) Signup and view all the answers

Which term refers to the point in a legal case where arguments from both sides are finalized, and the court is ready to make a decision?

Litis contestation (A) Signup and view all the answers

According to the provided content, what is required for collection commission to be recoverable?

The debt must have been handed over to a collection agency or attorney. (A) Signup and view all the answers

Which of these is NOT a typical role of a sheri?

Managing court records. (D) Signup and view all the answers

What is the significance of 'dies induciae' in legal proceedings?

It indicates the period within which the defendant has to respond to a claim. (A) Signup and view all the answers

Who is considered the 'dominus litis' in a legal case?

The person who has primary control and responsibility for the lawsuit. (C) Signup and view all the answers

What is the primary purpose of a Letter of Demand?

To give someone who owes money a chance to resolve the issue before court action. (A) Signup and view all the answers

What is the primary effect of declaring immovable property executable?

It permits the property to be taken and sold to settle the debt. (C) Signup and view all the answers

Which document is typically NOT found in the internal folders of a debt collection matter?

Initial client contact form (B) Signup and view all the answers

What is the purpose of a caveat placed on a property's title deed?

To prevent the property from being sold or transferred to another party. (B) Signup and view all the answers

When property is attached to satisfy a debt, what crucial document contains a list of the attached items?

The return of service (C) Signup and view all the answers

What is the deadline for a creditor to instruct the sheriff to proceed with a sale in execution after receiving a return of service?

Within 14 days (B) Signup and view all the answers

If a third party claims ownership of goods that have been attached, what is most crucial for them to provide to the sheriff?

Evidence, such as receipts or documents, proving ownership (A) Signup and view all the answers

What is the primary purpose of an interpleader summons?

To compel the parties in dispute to resolve their issue in court (B) Signup and view all the answers

Who typically issues an interpleader summons?

The sheriff (D) Signup and view all the answers

What action does the Registrar of Deeds take when immovable property is attached?

Places a caveat (warning) on the property's title deed. (B) Signup and view all the answers

What is the primary purpose of an Emolument Attachment Order (EAO)?

To take part of a debtor's wages to pay the debt. (C) Signup and view all the answers

Where can a S65 enquiry be conducted?

Only where the debtor lives, works or runs their business. (B) Signup and view all the answers

What is required to transfer a judgment to a different court?

An official copy of the judgment. (B) Signup and view all the answers

Which information must be included in a Certificate of a Civil Judgment?

The name of the creditor and amount owed. (D) Signup and view all the answers

What is one benefit of transferring a judgment from the High Court to a Magistrate’s Court?

Saves money and frees up High Court staff. (C) Signup and view all the answers

What might complicate the process of debt collection for creditors?

Debtors relocating without informing their creditors. (A) Signup and view all the answers

What do agencies that trace debtors typically charge for?

A fee for locating the debtor's new address. (C) Signup and view all the answers

How does the process for moving a judgment from the High Court to a Magistrate’s Court differ from a County Court Judgment?

It relies on the creditor's lawyer to confirm judgment amounts. (D) Signup and view all the answers

Study Notes

Debt Collection

Debt collection involves steps to recover a debt owed to a creditor.
Debt collection is regulated by the Magistrates Court Act and the National Credit Act 34 of 2005.
The National Credit Act aims to protect consumers from unfair or deceptive practices by credit providers.

Enforcing Judgments

Warrant of Execution: A court can order the sheriff to seize and sell the debtor's non-essential assets (e.g., furniture, electronics) to pay the debt. Some items are exempt (e.g., clothing, necessities).
Section 65 Proceedings: The creditor asks the court to allow the debtor to make monthly payments, considering their financial situation. This is cheaper than seizure of assets.
Garnishee Application: If the debtor is owed money, a court can order that money be paid directly to the creditor, if possible.
Undertaking Section 57: A debtor can agree to pay in smaller amounts admitting the debt and promising to pay.
Consent to Judgment Section 58: A debtor agrees to pay the debt in installments. The court immediately issues a judgment.

Debt Collection Process

Letter of Demand
Summons
(No response)
Request for default judgment
Enforcement of judgment
Payment received

Interest

Interest is payment for borrowing or lending money.

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Description

This quiz covers the key concepts of debt collection, including the regulations under the National Credit Act and Magistrates Court Act. It also explores various methods for enforcing judgments, such as warrants of execution and garnishee applications. Test your understanding of how creditors recover debts legally and fairly.