A debtor and creditor enter into an Acknowledgement of Debt (AOD) where the debtor acknowledges that he or she owes a particular sum of money to the creditor and undertakes to repay what is owing on terms agreed between the parties. This agreement is used as a shortcut to the judicial process of obtaining a judgment against a debtor should the debtor not commit to the payments as agreed in the AOD.

The AOD is usually in terms of Rule 11 and Section 57 of the Magistrate Court Act No. 32 of 1944, am amended. These provisions enable the creditor to approach the court for a judgment in default for the amount that the debtor has acknowledged. The judgment granted in terms of section 57(2)(ii) of the Act is considered as if issued under section 65A(1).

After the court has given judgment, the debtor must make payment within 10 days of the judgment or order. If this does not happen, the creditor may issue a notice in terms of section 65A(1) calling on the debtor to appear before court on a specified date to enable the court to enquire into the debtor’s financial position and make such an order as the court may deem just and equitable. The notice must be issued from the court of the district in which the debtor resides, carries on business or is employed.