Business Litigation: Unpacking The Dreaded Term… Debt Collection

It is not uncommon for businesses to sell goods or services to consumers on credit. However, once a consumer has accepted a credit agreement, they become liable for the payment of that debt, usually by way of monthly instalments. Therefore, when a consumer defaults on their instalments, the business is entitled to institute legal action against the debtor to recover the outstanding debt. This article will discuss how a company can recover an outstanding debt using the litigious process.

Letters Of Demand

Generally, the creditor has no obligation to deliver a letter of demand on the defaulting debtor before instituting legal action. However, the letter serves to alert the debtor of the amount of the debt and specify the default. It is important to note that such notification is a requirement under Section 129 of the National Credit Act 34 of 2005, as amended.