Administration order in terms of S74 of the Magistrates Court Act

S74 Administration Order


Administration order is a form of debt relief, aimed at the consumer who has only a small amount of debt ( maximum R 50 000)

Administration explained in 9 steps

Step 1

A consumer receives a summons to appear in court for debt that he/she did not pay. The consumer knows that if he/she goes to court he/she will lose his/her assets or the court will attach a big portion of his/her salary to repay the outstanding debt.

Step 2

The consumer visits an administrator’s office and has his/her finances assessed. This administrator is normally an attorney.

Step 3

The consumer must give the attorney statements of all the debt he/she owes, plus his/her last three months’ salary advices, proof of residential address and copy of identity document..

Step 4

The administrator calculates a repayment plan depending on how much the consumer can afford to repay each month.

Step 5

The administrator brings an application to court to have the repayment plan made an order of court. The court then also appoints an administrator to look after the administration until debt is paid in full.

Step 6

Any of the credit providers may attend the court application and voice their reasons as to why the administration order should not be granted. This rarely happens, and the administration order is granted by the court.

Step 7

The administrator sends the administration order to all the credit providers.

Step 8

The consumer distributes on monthly/ two/three monthly basis all received in a trust account amongst all the creditors.

Step 9

The administrator is entitled to receive a percentage of these payments as determined by the Magistrates Court Act for services rendered.

What is the expense of an implementing order?

There is a fee that the administrator can charge upfront. There isn't a fixed rate and each administrator has their own way of calculating the rate. This expense is usually made part of the administration order and the administrator collects his / her compensation once the compensation are distributed.

Why choose administration?

When a consumer receives a summons to appear before court to repay his/her debt, or where a court has already granted a judgment against the consumer, the consumer may apply for an administration in order to have his/her debt repayment administered in such a way that the person can still survive.
The total amount of debt should not exceed R50 000.
Who can apply for an administration order?

A debtor whose unpaid debt amounts to less than a total of R50 000 struggles to pay it off and does not want to face sequestration.

A debtor in the area in which he / she lives, carries on business or is working may apply to a Magistrate's Court.

An administrator is named to execute the order for administration. This means that the Administrator must: n form the administrative order for each creditor and the employer of the debtor; draw up and submit a complete list containing the names and amounts due to each creditor; and collect payments and distribute them to the creditors at least once every three months;

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