Formal procedural requirements for debt enforcement in terms of the National Credit Act

Abstract

This dissertation investigates, in general, the debt enforcement procedures contained in the National Credit Act. It provides information on the purpose of consumer credit legislation and the South African credit industry to indicate the necessity for proper regulation. It further identifies some areas that had been problematic in the debt enforcement process, but which were clarified by recent court decisions. Specific aspects related to current problems experienced in the interpretation of the Act with reference to debt enforcement are identified, and the opinions of various authors, as well as the researcher’s own opinion, are provided in order to find solutions to such problems. It is clear from the provisions of section 3 of the Act and the discussions throughout this dissertation that the legislature regarded the protection of the consumers as its first priority. A delicate balance must, however, be maintained to protect the consumers interests, and those of the credit provider, since it would inevitably influence the South African economy if the balance were to favour a particular party’s interests. Recent decisions by the courts indicate that the Act is not all-inclusive and that the common law will be used to provide guidance or to take precedence where the Act does not make provision for certain circumstances or debt enforcement procedures. This dissertation further illustrates that the legislature needs to refine the provisions of debt enforcement contained in the Act, to clear ambiguities and create legal certainty. For as long as there are ambiguities in the Act, both the consumer and the credit provider will be disadvantaged, since in that case, a balance between the rights and the obligations of the consumer and those of the credit provider does not exist. Despite the fact that these ambiguities will eventually be clarified by interpretations provided by the courts, the Act, currently fails in its purpose to a certain extent, since clear and precise legislation is required. However, expensive and time-consuming interpretations are now required from the courts to resolve practical problems and to clear ambiguities.