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By now, the January hangover has well and truly set in. The month-long December party has left many a bank account, kitchen cupboard and Jack Daniels bottle empty, and the next pay-cheque seems but a distant horizon. Invariably there’re a few bills that are mistakenly or not-so-mistakenly overlooked. Which may suit you if you’re the debtor. But if you’re the creditor, what do you do?  For the umpteenth time, you are the one left juggling your cash flow because your debtor has unilaterally decided to delay payment. At this point you may be seriously contemplating charging interest on overdue accounts. Adding interest onto outstanding balances can be a good way of forcing a debtor to pay on time. But before you do so, there are a few things you should be aware of. Agreement Do you have an agreement in place with your debtor that allows you to charge interest on overdue amounts? And does it clearly state the interest rate that would be charged? If there is no agreement in place, you cannot charge interest. The next opportunity you have to start charging your debtor interest is when you issue a summons against him. From the date of the summons interest can be claimed in terms of the Prescribed Rate of Interest Act – currently 15.5% per annum. Interest amount Okay. So your paperwork is in order and you’re ready to make your debtor pay. Just be aware that the moment you charge interest on an overdue account, the transaction may become an “incidental credit transaction” under the National Credit Act*. Even if the underlying debt or transaction does not comprise a “credit agreement” in terms of the NCA. This does not mean you need to rush out and register with the National Credit Regulator. But it does mean that the amount of interest that you can charge is limited to the maximum amount specified in the National Credit Act. This is currently set at 2% per month. Charging Compound interest If you want to compound the interest charged (ie. charge interest on interest) then this needs to be expressly agreed to in your contract. If it isn’t agreed to then only simple interest can be claimed. Collection So, you have an agreement in place, and the interest amount is within the National Credit Act parameters. You’ve started charging interest on the overdue account – and the debtor is still not forthcoming with his cash. What then? Given that, by virtue of charging interest, you may have an “incidental credit transaction”, you may need to: Ensure that you send your debtor a monthly statement, specifying the interest charged and the amount outstanding; and Follow the collection process set out in the National Credit Act, which includes sending a letter of demand to the debtor calling for payment within ten business days. The content of the letter of demand and the process followed must comply with the National Credit Act, so it may be prudent to consult an expert before taking any action. * The NCA does not apply where the customer is a juristic entity with an annual turnover exceeding R1 million. In Summary: Levying interest on overdue accounts can be a good way of forcing debtors to pay on time. But be aware of the legal parameters that need to be followed before you decide to charge that interest. Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.

If you’re reading this, then congratulations! You made it through the Silly Season alive. You dodged the carnage on the roads, your liver has finally recovered sufficiently to see another year in, and your stomach escaped intact, if not unscathed, after suffering through yet another notorious Christmas lunch. Let us spare a thought, though, for the families of those who lost loved ones over this period. May their pain ease with time, and may their thoughts be filled with happy memories of the ones they lost. Death is not always something we want to think about. But think about we must if we are to address the important matter of our will. No, not the will, or lack thereof when you were offered a third helping of mom’s Christmas pudding and custard. We’re talking about you and your possessions, until death do you part. Death is an inevitable, albeit undesirable, consequence of life. And a will can mean the difference between calm and order at the time of your death, or complete chaos. Constructing a will when you are of sound mind and able is extremely important. This will help ensure that your wishes are followed through and your possessions are distributed the way you want. Without a will, your loved ones will be left with the decisions, which could be extremely hard for them following your death, and can potentially give rise to conflict. When you die without a will your possessions are distributed according to the laws of intestate succession. The ramifications are multiplied if you have children – a minor child’s inheritance has to be deposited into the state-run Guardian’s Fund until the age of 18. Creating your will now will give you the peace of mind, knowing that your loved ones do not have to worry about what to do with your possessions and your wishes will be followed according to plan. Do I need a Lawyer? A lawyer can construct your will according to your wishes. Bearing in mind that there is a fee attached, so find out what you’ll be in for before you give the go-ahead. You do not necessarily need a lawyer, but this will depend on the complexity of your will. If you have a very straightforward will, then an attorney should not be necessary. Templates of wills are readily available, including on www.agreementsonline.co.za. However, if your will is complex then it would be prudent to consult an attorney to ensure that everything is detailed appropriately and no mistakes are made. How much does it cost? Construction of the will by a lawyer will depend on the type of will and how complex it is. Typically, this charge is based on the amount of time needed to construct the will. Financial advisors, insurance companies and banks offer will-drafting services, and are often willing to draft the will at no or minimal fee. However, true to the adage that "nothing is for nothing”, their no-fee or low-fee policy is invariably because they insist on being nominated as the executor in the will, which can earn them a tidy executor’s fee from your estate when you die. Or you can purchase a template of a will which you can complete yourself. The cost will depend on the supplier you get it from. What should I include in my will? Your will should include a variety of things: - Identification of an executor - Reference to Assets (Property, Cash, Stocks, Businesses) - Specifics on which assets should go to which person by way of a bequest - Identification of who your heirs are, being the person / people that would inherit the residue of your estate once all bequests have been distributed, and if there are more than one heirs, specify the percentage share that each gets. Who are Executors? Executors are people you appoint to take care of the specifics of your will. They will handle making sure the beneficiaries and heirs you have named get the possessions as you have described in your will. Executors are also responsible for paying any bills, dealing with any outstanding obligations, and ensuring everything goes according to your wishes. What are the Requirements for a Valid Will? In order for a will to be valid, there are certain requirements that must be met. Generally, the following should be considered when you are drafting your will: you must be over 18, or an emancipated minor you must be of sound mind with the ability to think clearly and make personal decisions you must sign every page of the will, in the presence of your witnesses two competent witnesses (not being heirs, beneficiaries or executors in the will) must witness the signing of the will. Once I Have Created My Will, Where Should I Keep It? Your will should be kept in a safe place, secure from damage. You could keep it with your lawyer, in a safety deposit box, or in a fire-proof safe in your home. The important thing is to keep it safe and protected from potential harm. How Often Should I Change My Will? The only thing that’s constant is change. As time goes by, changes in your life may have an impact on your will. The big-ticket items are getting married, having children, the death of anyone named in your will, and divorce, to name a few. So it would be a good idea to review your will regularly to make sure you’re still happy with it. Divorce is a particularly sticky one. According to the Wills Act, a bequest to your spouse is deemed revoked if you die within three months of the divorce. But if you die before the divorce is finalised, or after the three month window, your ex will inherit! If the thought of this is enough to make you turn in your proverbial grave, then the best time to review your will in the event of a divorce is immediately when the decision to get divorced is made.  In Summary: Death is a natural part of life. To avoid the potential chaos and conflict upon your death, make sure you have completed a will. And review it regularly, specifically when your personal circumstances change. Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.

  ‘Tis the season to be merry! As the new year approaches, staff embark on that obligatory end-of-year go-slow. You stumble across evidence that instead of franticly ticking off their 2011 objectives, your employees are spending Company t...

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