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An acknowledgement of debt confirms that a debt is owed by a debtor to a creditor. It may also include the terms for repayment of the debt and the interest (if any) that is applicable.
If litigation is necessary to recover the debt, an acknowledgement of debt allows for a fast and effective remedy by facilitating abbreviated forms of litigation, such as summary judgment and provisional sentence proceedings.
Fulls details of the contract:
The drafting process utilized for the Acknowledgement of Debt includes the following capabilities:
It is first ascertained whether or not the transaction concerned falls within the ambit of the National Credit Act.
If the National Credit Act applies, a comprehensive reformulation of the terms of the Acknowledgement of Debt is completed in order to ensure compliance with the Act.
The Acknowledgement caters for up to 15 creditors and up to 15 debtors.
Full details of every party signing the Acknowledgement are inserted, including full names, identity or passport numbers, addresses, contact numbers and email.
Corporate entities are fully catered for, including private and public companies, close corporations, trusts, partnerships, sole proprietorships and registered or unregistered voluntary associations.
In the event of a corporate entity being a party to the Acknowledgement, provision is made for the full identification of the entity’s representative and protection against insolvency or potential insolvency is catered for.
The amount of the debt is specified. (All currencies are catered for.)
The circumstances giving rise to the debt are recorded in full. If the debt arises out of the sale of goods, additional provision is made for terms relating to the repossession of the goods.
If requested, the repayment terms of the debt will be incorporated, including the due date(s) for repayment, the amount and number of any instalments, the method and place of payment, the dates on which any instalments will be payable, and the circumstances in which immediate repayment will be required.
If requested, comprehensive terms relating to the payment of interest can be included, including the rate of ordinary and penalty interest, the regularity with which interest will be compounded and paid, the total interest payable, and the circumstances in which interest rates may be varied.
Provision is made for the delivery of statements of account, if required, and for the allocation of payments.
Early repayment is catered for, as is the potential for early repayment penalties.
Conduct amounted to a breach of the Acknowledgement is clearly delineated and the consequences of a breach are canvassed in full – including remedies (both under the common law and the National Credit Act), legal costs, court jurisdiction and the legitimate exclusion of certain defences and exceptions.
The contents and terms of each Acknowledgement of Debt are dependent on the responses given during the online interview process. As a result, the above list constitutes a broad overview of the issues typically addressed in the document and is not intended to be comprehensive.