Eva Smith (Attorney) @ Lucid Living
During January, 35,347 civil judgments for debt amounting to R315.5 million were recorded.
Stats SA said there was a 25.3% decrease in the total number of civil judgments recorded for debt in 2011 compared with 2010. The fourth quarter of 2011 reflected a 23.8% y/y decline, while in December 2011 there was a 26.5% y/y drop to 27,131.
During 2011, 503,528 civil judgments for debt amounting to R5.1656 billion were recorded.
Stats SA also added that the number of civil summonses issued for debt for January fell by 8.9% y/y to 73,550. This compared with a 17.9% decrease in 2011 to 1,057,444.
A civil judgment refers to the final order of a court in a civil lawsuit, while a civil summons refers to a legal document informing an individual that a lawsuit has been filed against him or her.
A civil judgment process, is the course of action taken by a creditor to enforce their rights under a credit agreement. The civil judgment then permits the creditor, to repossess your assets or garnishee your salary, to settle the debt owed to them.
The National Credit Regulator’s Credit Bureau Monitor (Q4, 2011) highlights that 8,93 million are blacklisted (i.e. have an impaired record) on credit bureaus. An increase, for the quarter, of more than 100,000 people, who have fallen behind on credit repayments.
Despite that fact, the continuing fall in the number of civil judgments seems to indicate that creditors are holding back on taking legal action, that results in a civil judgment. So how are creditors enforcing their rights, under credit agreements where the consumer is not making repayments? Clearly, creditors cannot avoid legal action against all customers in default – so what is their plan?