Everything you need to know about a Section 129 notice

By Isabelle Coetzee

If you’ve been struggling to pay your debt and your creditors have been calling you, then chances are you’re about to receive a Section 129 notice.

But what is this document, and what does it mean? We track down the answers for you, and we look at what will happen if you try to ignore this notice.  

Tip: The best way to get out of debt is to apply for debt counselling. Click here and fill out the form.

What is a Section 129 notice?

According to Zwelibanzi Phiri, founder and managing director of Capnovation, a Section 129 notice is issued to a consumer under the National Credit Act.

“It informs you that you are in arrears by a certain amount at a specified date. It’s also viewed as a warning and last chance to react before legal action is taken against you,” says Phiri.

Bryan Smith, content manager of Wonga, says that a credit provider may issue this notice once you have been in arrears for more than 20 business days.

“The issue of a Section 129 notice is compulsory for credit providers, who must furnish such notice before contemplating legal action,” he explains. 

According to Annelene Dippenaar, chief legal and compliance officer at Experian South Africa, a Section 129 notice will advise you about your right to refer the credit agreement to a third party.

“This may include a debt counsellor, consumer court, or ombud to resolve any dispute under the agreement, before there are legal proceedings to recover your debt,” says Dippenaar.

Smith notes that while debt consolidation and debt counselling may assist you in repaying your loans in arrears, you will incur fees and other expenses charged by the debt review agency in order to make use of this process.

You can get in touch with a debt counsellor by filling in this form and requesting a full breakdown of the fees you will pay for the service, allowing you to assess the costs and benefits for your individual case.

What if you ignore it?

Dippenaar says that if you don’t respond to a Section 129 letter of demand, your credit provider may decide to take legal action, in which case the sheriff of the court will serve you with a summons.

“Once you receive a summons, you need to respond within the number of days indicated on it, either by indicating your intention to defend the matter, or by acknowledging the debt and settling the claim amount, or agreeing to an acceptable repayment arrangement,” says Dippenaar.

“If you fail to respond in the given period, the credit provider can apply for a default judgement against you in your absence. This judgment allows the claim of the credit provider to be upheld and taken in the consumer's absence,” he explains.

READ MORE: If your creditors are hounding you, will you be charged collectors’ fees?

Dippenaar notes that it's better to try to resolve the issue before legal action occurs.

“Do not ignore the letter, and make sure you formally respond if you have a defence against the claim. Otherwise, the matter will proceed to litigation stage,” says Dippenaar.

If it reaches this stage, she explains that the following will happen:

  • You may be liable to pay the credit provider's legal costs, such as phone calls, letters, and lawyer fees, should they win the case.
  • If you decide to defend the matter in court, you will need to pay for your representation. Legal proceedings can be costly, difficult, and time-consuming.
  • You will also be liable for the legal collections department costs, the extra interest on the original debt, and fees for debt collectors and sheriffs.

Phiri points out that the best way to avoid this notice is to get a free copy of your credit report so that you can have a clear picture of your debts and ensure all your service providers are paid on time.

If you’re ever in doubt, he recommends you make arrangements to consult a professional.

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