The phone number is unknown. The voice on the other end knows your name, the amount you owe and which store account it belongs to. They want a payment today, or they say the next step is court. Your stomach drops, and the temptation is to agree to anything just to end the call.
Do not decide on the call. Debt in South Africa follows a defined legal process with timelines, and knowing where you are in it gives you time and options. That matters most after a tight December, when card and store account balances catch up with people in the new year. This guide walks through the steps from the first phone call to a court judgment, what you can do at each stage, and the mistakes that make things worse.
Here is the route, in order:
- Missed payments lead to calls and letters from the lender or a collector.
- The lender must send a formal Section 129 notice before it can go to court.
- The lender must wait the required number of business days before it can issue a summons.
- You get a summons, and you must respond to it.
- If you do not respond, the lender can ask for a default judgment, and enforcement can follow.
What is a Section 129 notice?
A Section 129 notice is the formal letter that a credit provider has to send under the National Credit Act before it can take you to court over a credit agreement such as a credit card, store account, personal loan or vehicle finance. It tells you that you are in default and points you towards a debt counsellor, an ombud, a consumer court or another dispute resolution route. It gives you a chance to fix the problem before legal action starts.
The timing rules are specific. Under section 130 of the Act, a credit provider may only approach the court if you have been in default for at least 20 business days and at least 10 business days have passed since it delivered the notice. Business days leave out weekends and public holidays, so the festive season stretches the clock. A phone call from a collector saying "court tomorrow" does not meet those rules. A notice does not mean you have lost anything, and it is the best moment to act.
The lender also has to prove the notice reached you. In Sebola v Standard Bank (2012), the Constitutional Court held that a lender must do more than show it posted the letter. It has to show it took reasonable steps for the notice to get to you, which in practice means evidence such as a post office track-and-trace record. The court may only decide the case if it is satisfied the required procedures were followed. If you never received a notice, say so when you respond.
What should you do when the notice arrives?
Treat it as a deadline, not as a final demand.
- Ask for a full statement. You are entitled to know how the balance was calculated: the original amount, fees, interest and payments. A collector may not try to collect more than you owe, apart from interest and costs that are legally recoverable.
- Offer a repayment plan you can keep. A smaller amount you actually pay is better than a bigger promise you break. Put the offer in writing.
- Consider debt review, and do it early. If you cannot meet your instalments across several accounts, a registered debt counsellor can apply for a restructure, and a court can adjourn a lender's case until the review is finished. There are two limits. Once a lender has started court proceedings on an agreement, you cannot apply for debt review on that agreement (section 86(2)). And a lender can give notice to terminate a review if you are in default and 60 business days have passed since you applied (section 86(10)). The guide to debt review or a consolidation loan sets out how that compares with a consolidation loan.
- Keep every letter, SMS and call record. Note the date, time and the name of the person you spoke to.
What if you get a summons?
A summons is a court document that sets out the claim and tells you what to do and by when. Never ignore it. In the Magistrate's Court you have 10 days after the summons is served on you to deliver a notice of intention to defend, and the rules leave out the days from 16 December to 15 January when counting. Read the deadline on your own summons, because that is the date to work to.
If you miss it, you can still deliver the notice until the lender has actually been granted default judgment, but you may be ordered to pay the costs of the lender's request. Default judgment is granted on the lender's evidence alone, without hearing your side, and after it the sheriff can attach assets equal to the amount owed. If it is granted anyway, you can apply to have it set aside. You generally have to do that within 20 days of finding out about it, and you must show good cause.
Responding in time keeps your options open. You can dispute the amount, point out that the lender did not follow sections 129 and 130, or offer a payment arrangement. If you are over-indebted, the court can also refer the matter to a debt counsellor for a recommendation (section 85). Contact a debt counsellor, a legal aid clinic or an attorney straight away.
Can a lender take money from your salary?
Yes, but a court has to be involved. An emoluments attachment order (sometimes called a garnishee order) makes your employer deduct a fixed amount from your pay and send it to the creditor. Before 2016, these orders could be issued without a court looking at whether they were fair. On 13 September 2016 the Constitutional Court ruled in University of Stellenbosch Legal Aid Clinic v Minister of Justice that no such order may be issued unless a court has authorised it, after being satisfied that it is just and equitable and that the amount is appropriate.
If you see an unexpected deduction on your payslip, ask your employer for a copy of the order and check it against your records. The guide to reading your payslip shows where deductions appear. If the deductions leave you short for the month, the guide to handling your money after losing your job shows how to work out how many months your essentials are covered.
Does an old debt ever expire?
Many ordinary debts prescribe, which means they can no longer be enforced, three years after they became due, under section 11(d) of the Prescription Act. That covers things like credit cards, personal loans and cellphone contracts. Three things interrupt the clock and start it afresh: admitting the debt, verbally or in writing, making a payment towards it, and the lender serving a summons. Talking about a payment arrangement is not by itself an admission, but a written acknowledgment or any payment can be.
That is why you should not make a small "goodwill" payment on a debt that is several years old without getting advice. Two more points matter. A debt that has become a court judgment lasts 30 years, not three. And since 13 March 2015, section 126B of the National Credit Act has stopped credit providers and collectors from selling, continuing to collect or reviving a credit debt that has prescribed, although the Supreme Court of Appeal held in Kaknis v Absa (2016) that this does not reach back to agreements made before it took effect. If you think a debt has prescribed, you can dispute the listing with the credit bureau and, if that fails, take it to the Credit Ombud. Whether prescription helps with a particular agreement depends on the facts, so check with a debt counsellor or attorney before you rely on it.
What are collectors not allowed to do?
A collector may remind you of a debt and ask for payment. The Council for Debt Collectors' code of conduct sets the limits. A collector may not:
- threaten you or your family with harm, or use abusive, obscene or intimidating language;
- call or visit to demand payment on a Sunday or between 9pm and 6am, unless you ask them to;
- contact your employer before a final judgment to pressure you, although they may contact it to verify your employment or earnings;
- discuss your debt with your friends, relatives or neighbours, apart from trying to get your contact details;
- threaten legal action they have no intention of taking; or
- try to collect more than you owe, apart from interest and costs that are legally recoverable.
Threats, assault and theft are crimes under any circumstances. Collectors must register with the Council for Debt Collectors, but attorneys and their employees are exempt from that registration, so ask who is calling, which company or firm they work for and who they collect for, and ask for the debt in writing. If a registered collector breaks the code, complain to the Council, which can investigate and withdraw the collector's registration. Also tell your lender, who remains the party you owe.
If the collector's calls started because you borrowed from an unregistered lender, read how to avoid mashonisas and cash loan traps first, because unregistered lenders bring their own problems.
How can Budget Hub help while you sort this out?
Dealing with a collector is much easier when you know exactly what you can afford. Enter your income and your spending in Budget Hub's expense categories, which include credit cards, store accounts and personal loans, and you can see how much of each month is already going to debt. Set a monthly budget figure for the survival version of your month and compare it with what you spend. If you import a bank statement as a CSV, the transactions list shows what actually left your account, which helps when you need to check a collector's version of events. The free plan covers one upload a month and the first 50 transactions.
Quick answers
How long does a lender have to wait before it can sue?
You must have been in default for at least 20 business days and at least 10 business days must have passed since the Section 129 notice was delivered. Weekends and public holidays do not count as business days.
Can you be arrested for not paying a debt?
No. A civil debt is not a crime. Ignoring a summons can lead to a default judgment, and the judgment can lead to attachment of assets or a salary deduction order.
Can a collector phone your employer?
Not to pressure you before a final judgment. The code of conduct only allows contact with your employer to verify that you work there or what you earn.
Does a debt disappear after three years?
Not automatically. A debt can prescribe after three years, but admitting it, paying towards it or being served with a summons restarts the clock, and a judgment debt lasts 30 years.
Should you pay a collector over the phone?
Not before you have the debt confirmed in writing with a full statement and you know who you are paying. Pay only into the lender's account, and keep proof of payment.
The worst move is to hide from the problem. Open the letter, ask for the statement, and write down one realistic payment before anyone else decides it for you.