With the state of our economy and the fact that it’s getting worse not better, debt collection is at an all time high as consumers are struggling to meet their debt commitments and the wolves come howling at the gate.
Most debt collectors threaten and harass people with dire legal consequences to get them to pay their debts. The reality of it though, is if a debt collector is trying to collect an unsecured debt (one that isn’t using collateral towards the debt, such as an asset like a car for example) he is quite limited in terms of the legal actions he can take in order to collect the debt from the consumer.
If the debt is secured the process then becomes much more concerning. A secured debt is collateralized with an asset that you own, such as a house for example, which can be taken away (i.e. auctioned off via the implementation of a Court ordered Warrant of Attachment/Execution) if the debt isn’t religiously paid.
Most debt collectors are paid based on the amount of money they collect. They may give up if the collection amount is too small, however you don’t get off that easily.
The fact that the debt was sent to collection agents; and they would have most likely updated the various credit bureaus with regards to your poor payment history, unpaid debt will further damage your credit history and credit score.
Debt collectors will go to considerable legal lengths in order to collect on large amounts of debt. If a debt collector sues you, you will be notified of the legal action via means of being served a summons, which will tell you why you are being sued, for how much and what date you must appear in court if you wish to dispute the matter or make a case against such.
Should the debt collector win the case, the magistrate/judge will award the debt collector a certain amount of money in terms of “how much” they are entitled to collect from the consumer.
However, the debt collector cannot just collect the money from you right away, what happens if you don’t have it?
Instead, the debt collector must request the court’s permission to take specific collection actions in order to try to recuperate the debt from you. This is where it becomes very scary indeed for the consumer in question because let’s be honest…there is no real “nice way” to collect on a debt.
For example, the debt collector may ask the court’s permission to:
- Garnishee your salary by way of an Emoluments Attachment Order (E.A.O). If the court gives the debt collector permission to garnishee your salary, it will issue a court order (E.A.O). This will require your employer to deduct a certain amount off your salary each month for a certain amount of time until the debt is settled in full. This is a serious one as you will have no choice in the matter and you can’t instruct your employer not to deduct, as to do so will make them liable be held in contempt of court and they can actually be locked up for not fulfilling an court ordered instruction.
- Repossess one or more of your assets to recuperate costs. If a debt collector gets permission to uplift an asset that you own (Warrant of Execution/W.O.E), the Sheriff of the court arrives and collects the asset which is then sold in a public auction and the proceeds are applied to your debt. This can either settle the debt in full, and if there are any remaining monies it will be paid back to you. If there is a shortfall however, they can then choose to make payment arrangement with you directly to pay off the shortfall or proceed to obtain an garnishee for your salary.
- Put a judgment lien on one of your assets, this can be a house or vehicle. When a lien is placed on one of your assets, you cannot sell or borrow against it without paying the debt collector the money you owe in full so the lien can be removed. In the simplest of terms, they hold your asset at ransom until you pay them back.
IMPORTANT: “ALL” debt collectors need to be registered with the Association of Recovery Agents (ADRA) and openly provide you with their registration number. Be advised that the collection company is not registered under one membership number, but all agents of the debt collection company have to have their very own registration number. If any “debt collector” approaches you and they do not have a debt collectors registration number be advised that they are then collecting illegally and you are within your rights to report them to ADRA.
Note: Attorneys firms do not require registration with ADRA, hence there are many legal firm that specialize in debt recovery. This does not mean that they are above the laws of responsible debt collection though! They have to follow the same legal collection process like everybody else.
Therefore OUDS is willing to assist consumers in this predicament with a free service of a financial assessment, assist the consumer to organize an affordable, realistic and structured monthly budget and debt management plan thereby providing consumers with a guideline for eliminating and remaining out of debt.
Oyisa United Debt Specialists is therefore committed to assisting consumers struggling to make their debt repayments and facing financial difficulties, to solve their debt problems and empower them to take back control over their financial situation.
With over 11 years of specialized experience in the debt & legal field Oyisa United Debt Specialists is committed to assisting South African consumers in financial liberation.