How to Issue a Compliant Section 129 Letter in South Africa
How to Issue a Compliant Section 129 Letter in South Africa

As a business owner, there’s nothing more frustrating than a vendor or customer who fails to pay what they owe. Unpaid fees or invoices can significantly strain your cash flow and disrupt your operations. When this happens, acting quickly and following the proper legal procedures to recover the outstanding debt is crucial.

One of the first steps in the debt collection process is sending a Section 129 Letter, also known as a Letter of Demand. This formal written notice informs the debtor that they owe you money and gives them a deadline to pay before you take further legal action. Sending a compliant Section 129 Letter is an important milestone, as it demonstrates that you’ve followed the correct protocols and lays the groundwork for any future court proceedings.

In this blog post, we’ll walk you through the key elements of a compliant Section 129 Letter in South Africa and explain how to ensure yours meets all the necessary requirements.

What to Include in Your Section 129 Letter

  1. Clearly Identify the Debtor

The first step is ensuring your Section 129 Letter is addressed to the correct person or entity. You’ll need to include the full legal name of the debtor, as well as their physical address, email, and any other relevant contact details.

Getting these details right is essential. If the Letter is addressed to the wrong person or address, it could be deemed invalid and you may have to start the process all over again. Double-check this information before sending out the Letter.

  • Specify the Owed Amount

In addition to the debtor’s details, your Section 129 Letter must clearly state the total amount owed. This should be written out both numerically and in words to avoid any confusion. Ensure that you include a full breakdown of the monies that make up this total

  • Allow Adequate Time to Pay

Depending on whether the National Credit Act (NCA) applies to your agreement, you’ll need to give the debtor 20 business days to pay the total amount. Make sure you specify the exact due date in your Section 129 Letter.

  • Outline the Consequences of They Fail to Pay

Your Letter should also outline the consequences the debtor will face if they fail to pay. This includes the possibility of their credit record being adversely affected, as well as any legal action you may pursue, such as a summons for the outstanding amount or a repossession of the items purchased on credit.

Be clear and concise about these potential repercussions. You want the debtor to understand the gravity of the situation and know that you’re prepared to follow through if they don’t settle their debt.

  • Highlight the NCA Compliance

Finally, your Section 129 Letter must include a specific clause about the NCA and adverse credit listings. This informs the debtor that if they don’t pay, you may report the non-payment to the credit bureaus.

Crucially, you don’t need to obtain the debtor’s prior written consent to do this. However, you do need to state it explicitly in the Section 129 Letter. Leaving out this clause could undermine your ability to take this step later on.

Get It Right the First Time

Issuing a compliant Section 129 Letter may seem like a tedious process, but it’s an essential part of debt collection. Taking the time to ensure your Letter checks all the boxes will pay off in the long run. To guarantee your Section 129 Letter is legally compliant, it’s a good idea to consult with a legal professional or approach a reputable debt collection service. Cred-it-data walks alongside you when it comes to credit management. We can ensure that your entire process, from application to collection, is compliant and robustly built into your systems to reduce collection time and inefficiency.

Our services also include assisting you in taking on financially secure clients and suppliers, offering comprehensive credit reports and giving you a clear picture of a supplier’s financial health, payment patterns, and credit score. Take a journey into the know and contact us today!

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