Debt Collection is an important part of the economy of South Africa. Outstanding debt of debtors amounts to billions and the current non-payment rate has an effect on our economy. Interest rates in terms of unsecured and short-term debt may increase in the future due to the increase of debtors failing to honour their debt.
2. What is debt?
When parties enter into an express or implied agreement, whether orally or in writing, and one of the parties (the debtor) has a duty or an obligation to pay money back to the other (the creditor) in terms of monies lent and advanced, delivery of goods and/or services.
Debts owed by debtors to creditors may range from credit agreements (secured- and unsecured credit), gym contracts, school fees, doctors’ fees etc. In terms of credit agreements the debt usually include the capital, interest and the cost of credit, which is usually regulated by the National Credit Act, 34 of 2005 (‘NCA’), subject to when the agreement was entered into.
