The current economic climate is filled with challenges, pitfalls and the inevitable unequal bargaining powers of the have and have nots. It is common knowledge that the National Credit Act 34 of 2005 does provide some help for individuals who are over-indebted and find themselves between a rock and a hard place – given that finances determine much of an individual’s position and direction in the world. The Act seeks to provide some much-needed assistance and clarity. However, this should not be overindulged or used as a fail-safe method of getting out of hot water. As with all things, the processes are not clear-cut nor are they reasons to intentionally make irresponsible financial decisions.
S79 of the NCA says “over indebtedness” refers to instances when consumers cannot satisfy their debts as per their credit agreements in a timely manner with respect to his or her financial obligations, prospects, means and history of debt repayment. Debt review can be initiated by the court by referring the matter to a debt counsellor in terms of s85 of the NCA to determine if the individual is over indebted. The process may also be initiated through the individual/consumer who can willingly apply to a debt counsellor to have him or herself be declared to be over indebted in terms of s86(1). Should the consumer then be declared to be so over indebted, the counsellor will provide a proposal for the Magistrates’ Court to make it an official Order of court to declare the agreement or agreements to be reckless.
This process must be followed in terms of National Credit Regulator v Nedbank Ltd and Others 2009 where there is limit to the usual jurisdictional monetary limits if the Magistrates Court.
A further point to note is the well-known s129 of the NCA which has also been the topic of numerous litigious matters. Should a credit provider not deliver the s129 notice, the court will refuse a summary judgment application by such a creditor provider. S130(iv)(b) of the NCA states that the s129 notice must be adequately served on the debtor.
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