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Knowing Credit: Defaulting [Part 3/4] Execution Process

Posted: 28 Feb 2018

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Welcome back! In our last lesson, we discussed a summons and judgment. Today, we will learn about what will happen when a judgment is put into action.
Definition of the Week: EXECUTION When a judgment is made, it needs to be executed. The execution process involves collecting the outstanding debt by various means.
The execution process is normally preceded by a court order to pay back a judgement debt. This could be either be done through an Emolument Attachment Order (EAO) or an attachment and sale of assets, to recover the cost of the debt. Emolument Attachment Order (EAO) An EAO is a way of collecting debt from a consumer. The court will order your employer to deduct instalments on the debt directly from your salary, and pay them to your credit provider. This is usually only used as a last resort. Your employer may not refuse to manage an EAO, nor can they take disciplinary action against you because of it. If you find that you do not have enough of your salary left over to support yourself after the EAO deduction, you may apply to the court to have it reduced or withdrawn. Warrant of execution, attachment, and sale of assets: If your credit provider receives a judgement for the attachment of goods from the court, you will be issued with a warrant of execution by the sheriff. The sheriff will then attach (used instead of payment) any of your movable property and goods of value, take them away, and store them until they can be auctioned to pay your debt.
  • If you have defaulted on your home loan and your house is the asset that acts as security for the loan, the house will be attached first. If it is sold for less than you owe, you will need to pay the difference.
  • For unsecured credit such as personal loans and credit facilities (like credit cards or overdraft amounts), your house will only be attached as a last resort.
  • If the amount received from the auction of your goods does not cover your debt in full, the credit provider can ask the court for another execution against you.
Helpful Hint: If your assets have been attached, and you pay the amount which was in arrears before your credit agreement is cancelled, you may get the assets back and have your credit agreement restored. If your credit provider has already cancelled your credit agreement, you can only get your assets back after you pay the entire debt in full. This brings us to the end of our lesson on the execution process. Remember to stay on top of your debt status by knowing what you owe and by making regular payments. Go to www.mycreditcheck.co.za to get your full credit report with breakdown of accounts, payments, and credit history. Stay tuned for our next lesson in the #KnowingCredit series, where we will learn about what to do if you have paid your outstanding debt, but you don’t see the payment on your credit report!

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