I N D U S T RY TA L K
Your quick guide to recovering debt It is no secret that economies around the world are suffering due to the global COVID-19 pandemic. Food Review spoke to Christine van Zyl of Christo Coetzee Attorneys about the tremendous impact of the pandemic on small, medium and large businesses.
M
any firms find themselves in the
“A liquidation application should be carefully considered as various factors need to be taken into account, such as whether your claim is secured or unsecured…”
precarious position of not having the cash flow to pay their suppliers or,
in the case of a supplier, their customers not paying them. As a supplier, you are entitled to payment for the services or goods you have delivered. The question, however, becomes how you recover at least some, if not all, of the debt owed to you? There are different legal remedies available to you to help recover debts incurred by your customers. In the same vein, as a customer, you
of first instance if you suspect that the company
have an obligation to pay your suppliers and
is trading in insolvent circumstances and you
if you owe money to your suppliers, you need
can either convince the court that the company
to understand the legal remedies which your
is unable to pay its debts or you have demanded
suppliers may use in order to attempt to find an
payment and no payment or compromise has
amicable solution for all parties involved.
been received within three weeks. A liquidation
As these are trying times for all companies,
application should be carefully considered as
it is recommended that you approach a legal practitioner, who will assist you in discussions with your debtors and/or creditors. As mediators we help you to initiate these discussions and ensure that such discussions reach a fruitful conclusion, helping the
or not be viable, you may enter into litigation against the debtor. The process is usually initiated by a letter of demand, followed by the issuing of summons for the payment of the
parties negotiate a payment plan, either in instalments or for future payment through an acknowledgement of debt. This type of approach will likely render the best results, allowing the company to build its cash flow, thereby ensuring that any debts are settled in full, with the added benefit of
debt. Once an order is granted in your favour, a warrant of execution can be issued. The Sheriff will approach the debtor and request that the debt be settled. Should the debtor not be able to settle the debt, moveable assets will be attached by the Sheriff and sold at auction to raise the money necessary to settle the debt.
retaining the important relationships you have built with your suppliers and customers. Once the parties have reached an amicable agreement to settle the debt, such agreement is encapsulated in a contract, ensuring that there is no misunderstanding between the parties.
C C
Should an amicable approach have failed
In the event that the Sheriff does not raise a sufficient amount to settle the debt or did not find disposable property, which would be
various factors need to be taken into account, such as whether your claim is secured or unsecured and whether there is a chance that you would need to contribute toward the costs of the liquidation proceedings. Liquidation applications is the most radical step in debt collection, because it may ultimately result in the winding-up of a company. It is an unfortunate reality that, in our current economic climate, your company may be faced with some form of debt collection, whether you are initiating the debt collection or are on the receiving end of it. We are able to assist you through this difficult time and provide you with legal advice that is customised to your needs. •
sufficient to satisfy the debt, you may apply to the court to have the company liquidated. Liquidation proceedings may also be a remedy
Christo Coetzee Attorneys – www.christocoetzeelaw.co.za
Christo Coetzee Attorneys We are not just lawyers, we are part of your business and can assist you in the following areas: • Labelling and advertising compliance • Regulatory compliance • Commercial law • Contracts • Litigation
Christine van Zyl: BSc (Hons.) Biochemistry, LLB, Diploma Cosmetic Chemistry
Tel: 012 342 1930 | Email: office@christocoetzeelaw.co.za | Website: www.christocoetzeelaw.co.za
June 2020 | Food Review
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