Reasons For Increase In Informal Debt Recovery Procedure

There is a strengthening of the relationship between non-legal practitioners and creditors attributable to a number of factors which include the following.

• The legal practitioners' costs involved in debt collection are extremely high for an average creditor. Whilst the law recognizes that in principle a successful creditor should be reimbursed by the debtor for the legal expenses incurred in bringing the law-suit, in practice the tariff laid down by the rules of court is so unrealistic that a creditor can recover from the debtor only a small fraction of the legal fees legitimately charged by his or her legal practitioner. Moreover the collection commission which the legal practitioner is obliged to charge his client for collecting an uncontested debt is recoverable from the debtor only where there is an agreement between the creditor and the debtor to that effect.