Know your rights – Credit Health Article

Clarifying Emolument Attachment Orders, illegal judgements and the In Duplum Rule

Do you have a garnishee order against your salary where your employer is deducting money from your salary and paying it over to your creditors? Do you know how this process occurred and what your rights are?

Emolument attachment orders (EAOs) are commonly, but mistakenly, referred to as ‘garnishee orders’. An EAO is granted in terms of the Magistrates’ Courts Act 32 of 1944 (MCA) and orders an employer (referred to as a ‘garnishee’, hence the confusion) to make deductions from a debtor’s salary or wages and pay these over to the creditor or his/its attorneys.

An emoluments attachment order can be obtained in one of the following three instances:
• Where the court has authorised it;
• Where the judgment debtor has consented to it; or
• Where the creditor first sends a registered letter to the debtor advising him or her that the judgment debt plus costs is still unpaid and warning that an EAO will be issued if not paid within 10 days. The creditor must also file an affidavit at court to confirm the outstanding amount.

The second and third instances create problems. In the case of a written consent, the clerk of court has no way of verifying that the debtor actually signed the consent or ascertain the reasonableness of the instalments consented to or even the circumstances under which the consent was obtained.

A recent debt summit showed that there is still continued widespread abuse and exploitation of garnishee orders together with judgments granted on irregular procedural steps.

With these illegal judgments and orders often comes excessive accumulation of interest. Time and time again debtors find themselves paying of a debt that seems to never reduce, and in fact increases, despite numerous payments made towards the Creditor. The In Duplum Rule protects debtors from exploitation by ensuring that their creditors cannot allow interest to accumulate indefinitely. Even though the In Duplum Rule has been a part of South Africa’s law for more than 100 years this rule is often ignored enabling creditors to claim indefinite amounts of interest for an indefinite period of time. The In Duplum Rule states that unpaid interest on debt owing ceases to accumulate once it reaches the amount of the capital sum. In other words, if you owe R50 000, the interest and fees cannot exceed R50 000. The In Duplum Rule does not apply only to borrowed money, but to all debts (including judgement debts) arising from a capital amount that is owed.

There is a clear and continuous abuse of power by lenders who permit interest to accumulate unchecked resulting in exploitation of borrowers. It is now time for debtors and consumers to enforce their right and seek appropriate relief.

This means that even if you owed the money to the creditor at the time judgment was granted, it may be rescinded in court, provided is was taken in an irregular manner in terms of Court Rule. Once rescinded the judgment listing will subsequently be removed from you credit records.