When a debtor is a man of straw, legal action can be instituted against the debtor and you may even get judgment in your favour, but the difficulty comes when the judgment must be enforced against someone who has little or no means to pay.
But does this mean that the debt owed by such a person should just be written off? Not necessarily. Although the process to be followed against such a person can be difficult and time-consuming, positive results are possible.
The process to be followed will normally start with a letter of demand to the debtor explaining the nature and reason for the claim being instituted against the debtor by the plaintiff and demanding payment by a certain date.
If the debtor does not respond to the letter of demand, the next step will be the issuing of summons against the debtor. This summons is served on the debtor by the Sheriff of the Court. The rules of court stipulate different time limits for different types of actions to be taken against a debtor and it should be noted that these steps cannot be rushed. The debtor for example will have 10 days to defend a summons from date of service. If he does not defend the summons or does not have a defence against the summons, judgment can be taken against him.
Once judgment has been obtained against a debtor, payment of the claim will be requested from the debtor. If he does not or cannot make payment according to the judgment a warrant for execution against his movable property (television, furniture, equipment etc.) is issued by the court. If the defendant does not own any movable property, which is typical in cases where the defendant is a man of straw, a warrant for execution against his immovable property (house, flat, farm etc.) is issued.
A warrant for execution against any form of property means that the Sheriff of the Court, after serving the warrant on the debtor, writes down (attaches) either the movable property or the immovable property owned by the defendant. This property is then sold by execution auction and the proceeds are used to pay the claimed amount.
However in most cases where the debtor is a man of straw the debtor does not own either movable or immovable property. Then a notice to appear in court in terms of a section 65A of the Magistrate’s Court Act can be issued. This requires the debtor to appear in court to be questioned about his financial position. Usually, if he is employed, an emolument attachment order is granted, which orders the employer of the debtor to pay a portion of the debtor’s salary directly over to the plaintiff each month until the claim amount is paid in full.
If the debtor is not employed and does not own anything of worth, the whole process will be unsuccessful. Commencing with legal action against such a debtor will accordingly only result in the running up of legal costs by the plaintiff with little or no prospects of success in claiming either damages or any other money owed by the debtor.
It is therefore advisable to consult thoroughly with your attorney before you commence with legal action against a debtor. Where there is a suspicion that a debtor may be a man of straw you may discuss with your attorney to first appoint a tracing agent to determine the financial position of the debtor and the information so gained may assist in your decision to institute legal action against the debtor or to limit your legal costs should he be a man of straw.