South Africa’s NINA debtor plight : lessons from the Scottish consumer debt relief system post the Covid-19 pandemic

Abstract

In this article, the authors consider the plight of the so-called No Income No Asset (NINA) debtors against the backdrop of debt relief measures provided for this category of debtors who find themselves in a debt trap. It is a well-known fact that South African insolvency law does not provide sufficient debt relief measures for all types of debts, and those, like the NINA debtors, who are effectively excluded from the relief afforded by the sequestration and ultimately rehabilitation procedures of the Insolvency Act 24 of 1936 have no proper statutory measure to provide a discharge of debt in instances where they may desperately need it. It is submitted that the debt restructuring mechanisms provided by the administration procedure and debt review measure, are not sufficient since these do not offer a discharge. Reference is made to the newly proposed debt intervention procedure that may provide some relief in this regard, but it is argued that the legislature needs to consider further procedures to deal with their plight. With the view of making some recommendations for reform, aspects of mainly the Scottish system of debt relief measures are also considered.