1) A person which is not capable of paying his / her monthly installments or not capable of paying the amount outstanding in terms of a court order, may apply to be placed under administration at the Magistrate’s Court. His / her oustanding debt may not exceed the amount of R50 000-00. After the administration order is granted and it appears that the debt exceeds the amount of R50 000-00, does not make the court order invalid.

2) The court application will be done in terms of Section 74 of the Magistrate’s Court Act. A person can apply for an administration order at the Magistrate’s Court where he / she stays or work or where the court order is granted.

3) The application is a prescribed form filled in by the debtor or his / her attorney and consists of a short summary of the debtor’s personal information, income and expenses. The application must be signed and be sworned by the debtor.

4) Together with the application a list of creditors is compiled that contains all the debtor’s creditors.

5) The court order as well as the list of creditors will be sent to the Clerk of the Magistrate’s Court so that a case number can be issued. Thereafter an application will be sent via registered post to each creditor informing the creditor of the court date when the application will be heard. The creditors may on the court date appose the application or object to the amounts stated in the application.

6) If the court is satisfied with the application, the Magistrate grants the administration application and an administration order is authorized with a garnishee order. The aforesaid garnishee order instructs the debtor’s employer to deduct the monthly payment, granted by the Magistrate’s Court, from the debtor’s salary and pay it over to the administrator.

7) The administrator is intitled to use the first payments for fees and expenses incurred during the application for an administration order.

8) Every three months a distribution account must be filed at the Clerk of the Magistrate’s Court wherein there is indicated the amount monies received from the debtor, the amount monies used for fees and expenses as well as the amount monies distributed to each creditor.

9) If a client pays the total amount outstanding to the creditors, the administrator issues a certificate in terms of Section 74 U, which will be sent to all the creditors and filed with the Clerk of the Magistrate’s Court. As soon as the afforesaid certificate is issued the administration order falls away.

10) Although nothing prevents a debtor to just pay the administration installments until the total outstanding amount is paid in full, the most important fact to understand is that the administration is just a temporarily solution and it is the debtor’s duty to correct his / her financial position to a point where he / she will be able to pay the creditors themselves. A debtor can improve his / her financial position by increasing his / her income or lowering his / her expenses. However, its the debtor’s duty to approach the administrator if they feel that they are capable to deal with their obligations.