Last week we spoke about some options in debt recovery. An examination was held of the debtor’s details, and we spoke about obtaining a garnishee order against wages. This week we’ll discuss other options that involve taking possession of property owned by the debtor and also paying by instalments.
To take property a writ of execution is required.
This allows you to have physical possession of the debtor’s goods. The typical process is that the sheriff takes a car, TV or business goods, and auctions them off. Frequently, a debtor can suddenly find the money to pay a debt, if the sheriff is about to take the boat.
Execution of personal property such as clothing, kitchen equipment and bedroom furniture is excluded. The usual items are cars, electrical goods and furniture.
Whilst land can be sold, it is usually the final option available to satisfy the debt because of the significant consequences in dealing with real property.
After the sheriff seizes the goods, advertises and conducts an auction, the judgement creditor receives the proceeds of the sale.
Another option is an instalment agreement. Even if terms are not agreed, the debtor can apply to the court, and the Registrar will make the order or refuse the application.
There are times when an agreement can be arranged between the parties without further orders made in court. There is an advantage to this. If the agreement is not registered and the debtor defaults, the creditor can proceed with other options without notice or application. If the agreement is registered, a stay in enforcement of proceedings will come into effect. If the debtor defaults, the default must be proven, and the order rescinded before commencing other action.
As you can see, there are many factors that should be taken into account when pursuing bad debts. Tough economic times will undoubtedly increase the number of debt matters and it is important to act quickly. A business that is prudent in managing debtors has a higher chance of surviving these difficult times. Debt collection can be effective when pursued the correct way.
If you have any questions you would like answered either confidentially or via this medium, please email us at email@example.com
This is intended for general information and does not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.