Debt collection law

8. Are there different collection processes which can used?

Yes, however creditors may decide which collection process they wish to use, subject to the relevant legislation applicable in each individual matter.

Soft Collections

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  No legal action is taken at this point in an attempt to collect the debt in an amicable manner and debtors are advised to make such arrangements and make the necessary payments in terms thereof or to settle the accounts at this point in time to prevent legal action. Further that in the event in which the debtor fail, neglect and/or refuse to make arrangements it will result in legal collection costs being incurred by the creditor and the debtor’s credit record being affected negatively.
  
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  Soft Collections usually entail a call centre agent contacting the debtor to make repayment arrangements or discussing and negotiating the payment of a settlement depending on the creditor’s instructions.
  
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  Payments in terms of the repayment arrangement can be agreed upon by making use of either a debit order or a ‘promise to pay’, also known as a PTP. In terms of the debit order the debtor will authorize a specified weekly/monthly deduction on a set date from his/her bank account until such time as the account is paid in full, thus less administration for the debtor to make sure that the payments is made, as such is done automatically. A PTP arrangement is when a debtor promises to make specified weekly/monthly deposits towards the account on a set date, the debtor needs to administer the deposit each month.
  
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  Settlement quotations provided will be due and payable within a set period depending on the provisions of the settlement.
  
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  In the event in which the debtor fail, neglect and/or refuse to make the agreed payments the creditor may proceed with legal action, subject to the relevant legislation applicable.