Debt relief as part of the social safety net : a comparative appraisal of the regulation of no income no asset debtors in Zimbabwe

Abstract

Zimbabwe has recently introduced a consolidated Insolvency Act [Chapter 6:07] that came into operation on 25 June 2018. The Insolvency Act regulates the debt relief system by consolidating Zimbabwe’s natural and corporate insolvency systems. This thesis sought to examine the regulation of the natural person insolvency system by the Insolvency Act with a specific focus on its provision of access to debtors with no income and no assets, the so-called No-Income-No-Asset (NINA) debtors and its provision of a concomitant discharge of debts. This analysis has determined that the Insolvency Act marginalises NINA debtors because of their dire financial circumstances that hinder them from meeting the Act’s stringent access requirements to facilitate relief from over-indebtedness. In light of the marginalisation of NINA debtors, this thesis proposes viable recommendations for reforming Zimbabwe’s natural person debt relief system to ensure its inclusivity and effectiveness. These recommendations mostly emanate from the internationally regarded policies, principles and guidelines outlined in this thesis. They are also based on the comparative analysis undertaken of leading natural person insolvency systems of England and Wales, Scotland and the United States of America, and the developing consumer insolvency regime of South Africa, which is in an active process of reform. A reformed inclusive, and effective natural person debt relief system that affords access and a concomitant discharge of debts to all “honest but unfortunate” debtors is essential because it provides a soft landing for consumers who have failed in their enterprises. Consequently, reform of Zimbabwe’s natural person debt relief system is increasingly important because it might help spur the country’s ailing economy that has been adversely affected by the Covid-19 pandemic and the consequences of which have had a ripple effect on consumers who have barely recovered from the adverse effects of the 2007 - 2009 global financial crisis.