Hanelie* has been a payroll administrator with a health services company for seven years. She’s the one who receives and administers the EAOs that come to the office.
“The thing about a garnishee,” she tells me,” is that it is very expensive. If you owe someone R20 000, and they get a garnishee on you for R300 a month, you will probably pay off almost the rest of your life, because the costs are very high.”
One staff member at Hanelie’s office had an EAO against unpaid school fees. Hanelie hauls out a file from the bookshelf packed with lever arch binders behind her, pages through the paper with a licked fingertip. “Initially, we thought it was going to take about 24 months. He owed the school R6050, but the garnishee order was for over R7000, at R300 a month, that includes the initial collection fees and all those things.”
“After the two years, we did another 14 months. And after that, we thought this should be finished by now, but when we got that statement, there was still over R2000 outstanding. We actually loaned him the lump sum just to pay them off, and he paid us the money back. Because it was just ridiculous. After three years and two months, and still R2000 owing…”
She snaps the file closed in disgust. “I also think for the creditor it is a last option, because it takes a very long time to get their money back. The people making money off the process are the lawyers and the collection agency. Some of these accounts they pay off something like R200 or R300, but you have almost a R100 admin fee. Then, the lawyers, for every phone call you make, they charge you an amount, every fax, every email is added to that person’s account.”
“Is it a fair system?” I ask.
“I don’t think the process is fair, but also I don’t think it is fair to have debt and not pay it,” she responds. “I think the making of debt is not [treated like] a serious thing. It is still quite easy to do. It is supposed to be harder [to be approved for credit]. When I look at the garnishee orders we get, it seems to be that retail debt is quite easy to obtain. But as soon as you actually want to buy some assets, like vehicles or whatever, then they have all these laws and it is strict.”
“I don’t know what the answer is for this. It is a problem, but the debt is a problem, and the not paying it back is a problem. That is the main problem. But there are people making money off it…” Lever arch files of people making money off it.