The debt alleviation measures in terms of the National Credit Act 34 of 2005

Abstract

SUMMARY There is a need for expeditious and efficient debt alleviation mechanisms to counter modern-day consumer over-indebtedness, of which obligations arising from credit agreements are a main source. The debt alleviation measures in the traditional insolvency regime, sequestration and administration orders, are inaccessible to no-income no-asset (“NINA”) debtors, mainly due to their lack of sufficient income and assets. In June 2007, when the National Credit Act 34 of 2005 (“NCA” or “Act”) became effective, it introduced an additional (to the aforementioned) debt alleviation measure into the insolvency regime, debt review. However, the latter also has access barriers for NINA debtors, and in an attempt to rectify this, the National Credit Amendment Act 7 of 2019 promulgated an even further debt alleviation procedure, debt intervention. The aim of my mini-dissertation is to investigate and compare the NCA’s debt alleviation measures, debt review and debt intervention, with the ultimate aim to ascertain whether the plight of over-indebted NINA debtors to access a sufficient insolvency measure is being addressed. My main finding is that although it is early days and the Regulations to give effect to the Act’s debt intervention process have not been promulgated yet, the legislature without doubt made a stride in the right direction when introducing debt intervention.