Pay on time, all the time!

Written by Your Future Now
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Despite notices and letters from your credit provider, you have not done anything to pay the money you owe on your loan or to make alternative arrangements. Credit providers can take you to court to get a judgement against you.

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Failure to pay can result in:

Summons and judgement

A sheriff of the court will come to your home or work when the credit provider decides to take action against you. They will serve you with a summons. You have a limited number of days to respond, and state whether or not you will defend the action.

Remember that you will have to carry the costs of any legal action. Everything done to get you to pay (phone calls, letters and lawyers’ fees) will be charged to you. This means your debt will increase.

You should only let the case go to court if you know you have a case to defend. Rather contact your credit provider’s attorney immediately to make an arrangement.

If you decide to defend the matter, you must decide who will defend you. You can do so yourself, but that is usually not a good idea as legal processes can be very difficult and lengthy. Getting an attorney is a better option, but that will cost you a lot of money. You should really try to resolve the issue before it gets to this stage, or rather accept the court’s judgement without fighting it.

Execution

Execution is the process of collecting the outstanding debt. It is usually in the form of a court order to pay the debt through an emolument attachment order (EAO) – better known as a garnishee order. The court can also grant permission to take property or good that you own and sell them to get the money back.

How does an EAO (garnishee order) work?

  • An EAO is served on your employer and not on you.
  • It is an instruction from the court to your employer to deduct money from your salary every month and pay it over until your debt is settled.
  • Your employer cannot refuse to deduct the money from your salary.
  • Your employer can charge a fee for managing the EAO (this will also be added to your debt).
  • You can apply to the court to have the EAO changed or overturned if you can show that you don’t have enough money left to support yourself and your family.
  • Your employer may not take disciplinary action against you because he or she has been served with an EAO.

Remember

You can, at any time, remedy a default (or put matters right) by paying the credit provider everything you owe.

Clear your  credit record

A credit bureau may not keep negative information on your record once you have paid all the arrears. As soon as you have settled the arrears amount, the credit provider must let the bureau know. The bureau must update your credit record within seven days.

It is important to check your credit record once a year. This is to make sure that no settled debts are still reflected on your record.

 

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