4. When will a debtor be in default in terms of his duty or obligation to make payment/s?
Once the debtor has failed/neglected and/or refused to make payment in terms of the agreement the debtor will be in default. Notice of such default must be given to the debtor by the creditor.
In terms of a credit agreement, once a debtor is in default and has been in default for more than 20 (twenty) business days a creditor is required to give written Notice to the debtor of such default before taking legal action. The Notice must propose to the consumer to within 10 (ten) days bring the arrears up to date; to make a repayment arrangements, alternatively to refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction with the intent that the parties resolve any dispute under the agreement. In the event in which the debtor fail to respond to the proposals by the creditor or rejects such the creditor may proceed with legal action after the expiry of the 10 (ten) day notice period.
5. When may a Creditor start proceedings to collect the outstanding debt from a Debtor?
This will depend on the agreement’s provisions and also the applicable law.
