A reassessment of the debt review procedure in light of the National Credit Amendment Act 19 of 2014

Abstract

The National Credit Act 34 of 2005 introduced a new procedure, namely the debt review procedure, which enables financially strained natural person consumers to obtain relief from over-indebtedness. In the absence of the confusion that the language used in this piece of legislation brought to the legal arena, this Act is largely consumer friendly. Indeed the National Credit Act is a difficult read owing to its voluminous nature and the generally inaccurate language that its drafters used in putting it together. In light of the above observation, the legislature promulgated the National Credit Amendment Act 19 of 2014 with the view of improving its readability in some cases and its clarity in others. This dissertation is dedicated to reassess the debt review procedure in light of the amendments made to it by means of the Amendment Act. Its objective is to establish the impact that the amendments have had on the position of the natural person consumer who seeks to utilise the debt review procedure to obtain relief from the courts, and recently, the Tribunal. During the discussion, the dissertation draws comparisons between the National Credit Act before and after its amendment by the National Credit Amendment Act with regard to some of the aspects of the debt review procedure. The following findings, alternatively conclusions are made. In a nutshell, the natural person consumer?s position is materially improved on the following grounds: more time is provided to over-indebted natural person consumers to seek relief from courts, given the new dispensation that forbids credit providers from applying for the termination of such review once it is pending before court; the Consumer Tribunal now has a new function to declare credit reckless, which would mean more applications for declaration of reckless credit and a speedy and more convenient process; a less expensive route to be followed in applying for the resumption of the debt review procedure and a clearer section 86(2) of the National Credit Act. All in all, this dissertation concludes that the new amendments brought improved debt relief for over-indebted natural person consumers who are party to specific credit agreements in respect to which, the National Credit Act, and more specifically, the debt review provisions apply.