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  1. #1
    Site Caretaker Dave A's Avatar
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    Slow to sue for debt

    Borrowers are in trouble but lenders are staying away from the courts in their efforts to recover bad debts, data released by Statistics SA yesterday shows.

    From December to February, the number of summonses for debts fell 11.3 percent while the number of judgments dropped 10.3 percent. The value of debts for which judgments were granted fell 2.4 percent.

    According to Stats SA, there were 60 920 civil judgments for debt in February worth R560.7 million. The largest portion of this was judgments relating to money lent and promissory notes and other acknowledgments of debt, which include credit cards.

    According to Econometrix, individuals account for nearly 90 percent of all summonses and judgments.

    While the numbers might seem benign, they did not point to an easing off of pressure on borrowers, economists warned.

    Nedbank's chief economist, Dennis Dykes, said the falling number of summonses and judgments was due to fear that an overzealous approach to debt collection would cause more problems than it would solve, and the long wait for a judgment to be finalised.
    full story from Business Report here
    Now is this an indictment of the legal process to collect debt, or a concern for a domino effect if we are too quick to damage a debtor's credit record?
    Last edited by Dave A; 24-Apr-08 at 09:54 AM. Reason: typo

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    back to the same old story who will pay for these debts yes we all know.

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    Platinum Member Marq's Avatar
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    Nedbank's chief economist, Dennis Dykes, said the falling number of summonses and judgments was due to fear that an overzealous approach to debt collection would cause more problems than it would solve, and the long wait for a judgment to be finalised.
    See the usual trick here......my favourite subject - economists.

    The trends are not like they should be, according to what the economists have been spinning out there. Their story has been, that there should be an increase in judgements, summonses, liquidations and insolvencies because inflation is up, interest is up and people are struggling and buying on credit like crazy and bla bla bla...

    But what do we see - a downward trend - oops - OK says the Nedbank guy lets talk about the legal system why thats the culprit now and take your mind off what we were talking about before because you see we may have been wrong all along because we did not guess this right.

    Wait for the stats to show an increase and we will see a whole new story on how we economists told you so. Its a win win situation, no matter what happens these guys will always be right.

    There are two vacancies available at Stats SA
    # Economist: Application of National Accounts
    # Senior Economist: Gross Domestic Product
    I don't know whether these are new positions or not but can you imagine - two more distributors of Capricious information working within the main dubious source that we use for Statistics. I think the already dubious reliability index of statistics is just about to go south and the bell curve just became a well curve.

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    Site Caretaker Dave A's Avatar
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    What is bugging me is the high cost of collecting money via legal process, and how long it takes. It is, quite simply, ridiculous.

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    Platinum Member Marq's Avatar
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    The legal profession has cornered and snooker us with this debt collecting business.

    It seems that if the outstanding is less than about R8,000 then you are throwing good money after bad. The attorney's I saw last week were using a guide of allowing for double the debt under R10,000. So if you wanted to collect say R5,000 then you should allow for R10,000 to collect less what what they could recover from the debtor. Ridiculous scenario. They prefer you go to the small claims court rather than process piddly amounts.

    This is another area gets me - commissions and percentages on moving target amounts. I term it the parasite paradigm.

    It takes the same amount of effort to collect R1 as it does R10,000. Greater amounts may or may not have more complications but this is rare - the basics are usually the same. So why should there be a percentage game applied to the numbers plus a charge for opening files, correspondence and petty's (and they know how to sting you in this area)? Rather a fixed tariff based on the amount to be collected applied by the legal profession across the board. This way everybody knows the score up front.

    It's the same for selling houses - we play the estate agents commission game and then despite rising house prices they want an increase in the percentage applied. Same for the transfer duties. Same now for the rates and taxes. No wonder we apparently have the most expensive house transfer administration costs in the world.

    Fixed tariffs across all transactions - from tax to houses to attorneys - would help sort out the inflation scenario and help the guys who want to stretch and do something to better themselves in the world and would help those planning their financial lives.

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    Site Caretaker Dave A's Avatar
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    It seems the SACP has been ducking their creditors by keeping cash off the books.
    The South African Communist Party (SACP) has on several occasions taken large donations in cash in order to foil its creditors, according to former Congress of South African Trade Unions (Cosatu) president Willie Madisha.

    He made the claim in an article in the Cape Times on Friday, in which he sought to "set the record straight" on events surrounding his axing.

    "Had such money gone through the party's books, creditors might have taken it, so there was always a call for cash," he said.

    "I was part of this, as were other members of the SACP.

    "We didn't see it as wrong because our priority was keeping the party afloat at a time when we were mired in debt."

    Last week, after a delay of almost a year, the SACP finally paid a R1-million debt to the Nelson Mandela Metropolitan University in Port Elizabeth for use of university facilities for the party's national congress in July last year.

    The university went to court last November after the party failed to honour numerous promises to pay.
    full story from M&G here

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    Platinum Member Marq's Avatar
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    "We didn't see it as wrong because our priority was keeping the party afloat at a time when we were mired in debt."
    Ah ha - keeping your business afloat 101, never had this on the list of things that one must do.......did it?.......or was it the unwritten law that is now ok to flaunt?

    Makes note to self........Must ask the tax man about this.

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