What if a debtor can't pay?

Few things are as frustrating an evasive debtor. Some debtors simply ignore court orders or hide their assets in bank accounts. So, what do you do when your debtor tries to evade payment? Luckily, the law provides a remedy.

IN SHORT: You need to get a garnishee order against the debtor's bank, or an emoluments attachment order against their employer - via the Section 65 process.

Section 65 of the Magistrate’s Court Act provides for the collection of a debt from a debtor against whom a judgement has been granted.

How to institute a Section 65 Financial Enquiry

1. First, you need to obtain a normal civil judgment ("order") against the debtor via the normal process.

2. You may then begin with the Section 65 process. If the record shows that the debtor was in court or represented on the day that the order was granted, he must be summoned to court by way of a “Section 65(A)1 Notice”.

3. The notice is then issued by the clerk of court, and the sheriff serves the notice on the debtor.

4. The debtor is summoned to appear at court on a specific day on which a “Section 65 Enquiry” is held.

What happens at the Section 65 Enquiry:

1. The enquiry is held to investigate the financial position of the debtor.

2. The debtor is required to testify under oath about his financial position.

3. The representative of the creditor may then cross examine the debtor.

4. The court may allow other witnesses or evidence as it sees fit.

After hearing the evidence, the court may grant the following orders:

1. Issuing of a warrant of execution.

2. An emoluments attachment order, where the debtor’s employer is ordered to pay a portion of the debtor’s salary directly to the Creditor.

3. A garnishee order, whereby a debt owed to the debtor by a third party is paid to the creditor.

What if the debtor fails to appear at the enquiry?

If the debtor fails to appear at court as per the notice, a warrant for their arrest may be issued. The matter then becomes a criminal one - which motivates debtors to start cooperating.

The legal process can be a long one, especially against "professional debtors" - people well-versed in dodging consequences. But, the consequences do eventually catch to them.

Contact us for more information on debt collection and other commercial law matters.