Debt court cases drop, but South Africans still under financial strain

Although debt-related court cases dropped sharply in the second quarter of 2025, reports show South Africans are still under financial strain.

According to Statistics South Africa, the total number of civil summonses issued for debt decreased by 14.7% in the April-June 2025 quarter compared to the same period in 2024. A more pronounced decline was recorded for civil judgments, which fell by 19.8% year-on-year.

Despite the drop in volume, the total value of judgments recorded saw a mixed picture. While it decreased by 10.1% for the quarter, the figure for June 2025 alone showed an 11.9% year-on-year increase to R299.5 million.

Key Figures for April to June this year when compared with the same period last year:

• Civil summonses issued: 93,625 (Down 14.7%)
• Civil judgements recorded: 26,501 (Down 19.8%)
• Value of judgements: R791.3 million (Down 10.1%)

However, the DebtBusters’ second quarter Debt Index for this year showed that 95% of people who applied to the company for debt counselling during the quarter had a personal loan.

A further 54% had one-month (payday) loans. These one-month loans have become a lifeline for many households, but they are expensive, typically attracting more than 23% interest per annum.

DebtBusters also noted that it had seen a shifting trend towards debt counselling. The number of people completing debt counselling has increased 12 times since 2016, it said.

In addition, the FNB Estate Agents Survey has shown that 24.5% of agents it polled reported in the second half of 2021 that incomes had fallen “far behind” house prices at the start of the interest rate hiking cycle.

That figure rose to 39% in the second half of 2024, at the start of the current interest rate cutting cycle, and has since climbed to 44% in the second quarter of 2025.

Statistics South Africa attributes the quarterly decrease in summonses primarily to declines in actions related to ‘other’ debts. Other debts refer to all other kinds of outstanding debt such as salaries and wages, medical fund debt, sponsored debt, class and tuition debt, tax, assessment rates and property levies.

There were also less summonses for money lent as well as promissory notes – a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.

The drop in the total value of judgments for the quarter was driven by a decrease in the value of judgments for money lent, “other” debts, services, and goods sold.

However, the June month-on-month data indicates a complex picture. While the number of summonses and judgments fell compared to June 2024, the value of judgments saw a notable 11.9% increase, rising from R267.7 million to R299.5 million.

The largest contributors to the total judgment value in June 2025 were:

• Money lent: R76.7 million (25.6%)
• Services: R66.6 million (22.3%)
• ‘Other’ debts: R65.6 million (21.9%)
• Promissory notes: R46.0 million (15.4%)

Gauteng and the Western Cape continued to account for the highest number of debt-related legal actions.

In June 2025, Gauteng saw 9,410 summonses issued and 1,954 judgments recorded, while the Western Cape recorded 7,862 summonses and 2,463 judgments.

The Northern Cape consistently recorded the lowest figures.

The data is based on a monthly survey of 203 magistrates’ offices, representing approximately 98% of all civil cases in South Africa. Statistics South Africa noted a preliminary collection rate of 84.2% for June.

IOL Business