Abstract:
The purpose of this study is to evaluate, within the practical arena, how debt counselling
industry guidelines, being the Task Team Agreements and the Court Application
Guidelines, challenge the application and interpretation of the National Credit Act
34 of 2005 (the NCA), in respect of the debt review process by leading to impractical
application. The study achieves this purpose by discussing select challenges under
two objectives to evaluate possible solutions to these challenges. The first objective is
to discuss select factors that a debt counsellor must consider in determining overindebtedness.
The finding of over-indebtedness is evaluated with consideration of the
concept “financial means, prospects and obligations” as described in sections 78 and
79 of the NCA. The interpretation thereof is done with specific reference to the
realisation of assets, consideration of household income, and the proposed consumer
budget. These challenges demonstrate how opposing views and impractical
expectations regarding “financial means, prospects and obligations” delay the court
process in debt reviews. The second objective of the study is to discuss select factors
that magistrates should consider in determining whether the re-arrangement proposal
of a debt counsellor is fair. The select factors discussed are: interest rate concessions,
repayment term concessions, the application of the in duplum-rule to debt restructuring
proposals, and the ordering of a reckless credit investigation by a magistrate. The
challenges discussed under the two aforementioned objectives demonstrate how the
interpretational uncertainties with regard to the select factors challenge the finalisation
of the debt review court process. The study concludes with recommendations on how
these interpretational uncertainties can be resolved.
