If your debtor has defaulted, you will need to send a formal demand (or appoint an attorney to do so). It is recommended – generally – that the demand is framed in terms of section 129 of the National Credit Act, 2008. Please also remember that if you intend to institute action if payment isn’t received the letter should also be sent by registered post.
With the introduction of the National Credit Act, 2008 and the Protection of Personal Information Act, 2012 (amongst other regulatory matters) it is critical for most businesses to undertake a review or update of their current credit application forms. This document is compliant with the current legislative framework. It is designed for businesses operating as manufacturers.
One of the important ways of securing a debt owed by a business is to obtain a cession of book debts. In essence what this means is that the creditor can look to the debtors (customers) of the indebted party as security for the amount owed from time to time. It is however important to ensure that the contracts between the customer and its debtors don’t restrict cessions.