Determining The Best Debt Collection Approach,
by Philip Roberts and Herman Bonnet

It is vital that any business, especially those offering products or services on credit, manage their debtors effectively, particularly in matters of payment terms. This can be done by identifying and differentiating between your slow-paying debtors (also slow-paying debtors with which the company intends to continue its relationship) and the non-paying debtors.

Determining the appropriate approach.

With slow-paying debtors, it is generally advisable that a “soft collection” – process is followed. The purpose of soft collection is to negotiate for a suitable repayment plan that will benefit both parties, rather than instituting a costly formal litigation process against them.

Where there are slow- or non-paying debtors that the company wishes to continue a relationship with for any reason, it would certainly not be advisable to proceed with a formal legal process, as this would obviously place a strain on the business relationship. An alternative approach would be to negotiate a written payment agreement between the parties (normally more beneficial to the debtor, but with the bigger aim of continuing the relationship).

In the case of non-compliant debtors – debtors who are not making any payments at all – a soft-collection process is then not advisable, as the debtor will likely end up not paying in terms of the repayment plan. In this case, proceeding with a formal litigation process against the non-compliant debtor is favoured.

Litigated undefended debt collection.

The collection process will normally be initiated with a Letter of Demand – a letter demanding payment from the debtor within a reasonable period (normally between 7 – 10 business days).

If the debtor fails to respond timeously to the Letter of Demand, a Summons should be issued at Court. The Summons is a further formal demand for payment containing the material terms of the claim against the debtor.

Service (personal delivery) of the issued Summons on the debtor must be affected by the Sheriff of the Court. This process may take up to one month to complete, depending on how quickly the whereabouts of the debtor can be determined.

Once proper service of the Summons has been effected, the debtor will have ten business days to enter a notice of their intention to defend the action. Failure by the debtor to do this will result in the matter being an undefended action and the plaintiff can then proceed to apply for Judgment by Default from the Court.

This Application for Default Judgment may be considered by the Magistrate or Judge in open Court by hearing verbal arguments, or on sight of the documents alone by the Clerk or Registrar of the Court, depending on in which Court the action was initiated, the complexity of the claim, and the amount claimed. The Court can take up to two (2) months to grant Default Judgment.

The execution process.

The granting of a Default Judgment presents a few options to the Plaintiff, one of which entails a Warrant of Execution against Movable Property of the debtor to be issued by the Court.

The Sheriff will then be instructed to serve the Warrant of Execution on the debtor and draw up an inventory list of (or “attach”) the movable property that may be sold in a sale of execution, should no payment arrangements be forthcoming.

The Warrant of Execution remains in force four (4) months from the attachment of the movable property, and it is a criminal offence to dispose of the movable property during the period of attachment.

Should the debtor still fail to make adequate payment arrangements after the attachment of the goods, the Plaintiff can instruct the Sheriff to remove the attached goods into storage and proceed to arrange a public auction (or “sale in execution”). The funds raised in such an auction will then be allocated towards the debt owed.


A formal litigation process, be it undefended or otherwise, can be a costly process and should always be weighed against the probable return or outcome in each case. Debt collection based on written contracts may have various pitfalls and it is recommended that you contact one an experienced commercial litigation attorney to assist with the collection of debt against non-compliant debtors in a fruitful and commercially viable manner.


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