Monday, 15 April 2013

Let us talk about debt, baby

First printed in The Namibian 04 April 2013

This week I wish to share with you my experience with debt and the threat by the lawyers that “the Sheriff of the Court” will come take my possessions and sell them to repay debts that have been registered with the court. I have two registered debts that I am aware of. Both are debts incurred while running my company and applied by the creditors to my personal responsibility. The one debt is stated by the creditor to be over N$ 25 000 and thus is a matter for the High Court.

Now, you must keep in mind that though you might not wish to discuss your debt, the creditor is doing everything possible to make sure as many people as possible know about it. The use of the threat to inform the widest possible audience is the greatest tool of the creditor to force you to pay what the court has agreed you owe them. (This is important: The amount you are supposed to owe is the amount they have convinced the court you must pay – and I will come back to that later.)

Allow me to share with you the information about my court registered with the High Court (all is public information supplied by the creditor and their lawyers).

The Deputy Sheriff of the High Court was ordered to serve on me a subpoena (an order to appear before the High Court) for 11 April 2013 at 10h00. On this day, the judgement creditor, namely Institute for Public Policy Research (IPPR) wishes the court to give an order  to pay the outstanding default judgement amount of N$ 28 630 When I appear in court, the creditor expects me to provide a proof of my monthly salary or income, my monthly income and expenses, proof or all debts and payments thereof, a list of my assets and liabilities, proof of expenses in respect of housing and all other documents that may assist the court to investigate my financial position and determine the instalments to be paid by me for this debt. (I am unfortunately an unemployed writer living on a friend’s farm ;-)

By now, most of us have learned that my explanation of “the behaviour of the organisation has led to me to withhold my labour” or the belief by the IPPR that “you have been duplicitous and give Black Economic Empowerment a bad name” is of no interest to the court. In the eyes of the law, I have been found guilty after due process has been followed by the creditor.

And now we come to the root of my problem. I accept the judgement, but would like some further information or assistance. For example:
  • What was the original debt and what other costs have been added to get to the amount in front of the court?
  • Why did the lawyers make use of a sister company to do the tracing and change my erf numbers as if I had a new address during the process of getting the default judgement (and neatly changed it back to get the summons served at the correct address)?
  • Which amounts are actually allowed to have interest added? The main debt is stated in my papers, but can the lawyers charge interest on their charges? Or charge interest on the services provided by the Sheriff of the Court? I could really use a clear indication of which costs attract interest and which do not.
  • When does my debt reach “in duplum”?
In Namibia, the Consumer Law can do a lot to prevent the endless circle of debt and poverty consumers get trapped in. Take for example the principle of in duplum. “In duplum” is a Latin phrase derived from the word in duplo which means “in double”. The rule has its origin in the Roman Dutch law. It basically provides that interest stops running when unpaid interest equals the outstanding capital amount.

It has always been considered illegal (and immoral) to charge interest which is more than the original amount owed, except in special circumstances but people such as banks, lawyers, debt collectors, etc. get away with it because it is a common law rule. This means there is uncertainty when applying the rule, especially by the courts. Thus, a creditor should not charge more than twice the original amount due - but lawyers charges, tracing fees, administrative costs, etc can inflate the debt to almost any amount?

This common law “in duplum” rule has been codified by statute in South Africa, which now protects consumers against predatory interest rates on loans and further provides better clarity about when the rule applies and when not.

Namibia needs legal protection for its consumers – the consumer law is a necessity not a nicety!

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