Lesson 1, Topic 1
In Progress

1.6. Sureties relating to debtor accounts

ryanrori January 23, 2021

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A surety, surety bond or guarantee, in finance, is a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company that provides this promise, is also known as a surety or guarantor.

The situation in which a surety is most typically required is when the ability of the primary obligor or principal to perform its obligations to the obligee (counterparty) under a contract is in question, or when there is some public or private interest which requires protection from the consequences of the principal’s default or delinquency. In most common law jurisdictions, a contract of suretyship is subject to the Statute of Frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and the principal.

This Surety Agreement is between a debtor and a surety whereby the surety agrees to be responsible for the debt and obligations of the debtor to a lender. The surety acts as a security net for the lender that in the event the debtor fails to make any payments due to the lender, the surety takes over.

What is a clock number?

A unique alphanumeric identification number used to identify an advertisement and its creators/source (the advertising agency). The number is used from the clearance process through to transmission and post-transmission reporting.

Please note that clock number must be entered in the following format:

1. Agency Code (3 alpha characters)

2. Terminator /

3. Client Code (2 alpha characters)

Marriage contracts extend to Community of Property and Antenuptial Contracts.

Marriage out of Community of Property

The parties can draw up a contract in which they indicate that they want the marriage out of community property.  This is termed an Ante Nuptial Contract (ANC).  The ANC can contain any stipulation that is not contra bonos mores (against goods morals).  In other words, parties agree that community property will not apply to their marriage.

An ANC contract is an agreement between the parties in terms of which they reach consensus on the patrimonial and financial consequences regarding their marriage.  The essential characteristic of a marriage out of community property is that there is no joint estate.  The parties retain their respective estates as their own property and each administers his/her own estate independently.  They can however be joint owners of assets, for example a house, or a vehicle.  The independence can be seen that they can act independently and not be liable for the debts of one another.  However, an exemption is that when household necessaries are acquired, both spouses will be liable jointly and severally.

Marriage settlements can be determined in an ANC contract and are considered a donation, for example a house, cash, insurance policies or even the creation of a trust in favour of the other spouse.  Due to the accrual system, which can now apply to these marriages, these settlements are not often made in ANC’s.

As there is no community of debt, creditors cannot attach the assets of the other spouse.  The parties are thus judicially equal but economically unequal.  Each party may freely dispose of his/her assets and make a separate will.

Portfolio Recovery

  • Portfolio Recovery is a type of debt collector that purchases unpaid debts from original creditors. These creditors might include credit card companies and banks. After an account becomes several months past due, it’s standard for original creditors to sell these accounts to recovery companies. Once Portfolio Recovery buys these delinquent accounts, debtors must make payment plans through the collector. This can include paying the full balance to settle the debt or negotiating a debt settlement with the company.

What is the power of Debt Recovery Officer ?

The order issued by the Debt Recovery Officer shall be deemed to be the order issued by the Tribunal. If any person disobeys any order given by the Debt Recovery Officer, the Tribunal may institute contempt proceedings against that person under the provision of the Act.

In recovering the principal and interest of a loan, the Debt Recovery Officer, may follow the following procedures:

In accordance with the decision of the Tribunal the Debt Recovery Officer may follow the following procedures, subject to the prevailing law.

(a)to take possession of, or auction, the borrower’s other movable or immovable property whether furnished as security or not,

(b)to take possession of, or auction, the guarantor’s movable or immovable property,

(c)Where any individual is a borrower or guarantor, to arrest such individual and detain him pursuant to the prevailing law.