Selected aspects of debt review in terms of the National Credit Act 34 of 2005

Abstract

The National Credit Act which came into full effective operation on 1 June 2007 has introduced significant changes to the consumer credit landscape. One such novel aspect is the provisions relating to over-indebtedness and the debt relief that may be accessed by an over-indebted consumer. Section 86 of the National Credit Act introduces a procedure called ‘debt review’ in terms whereof a consumer can voluntarily apply to a debt counsellor to be placed under debt review. The purpose of this process is for the debt counsellor to do an assessment of the consumer’s financial situation with the view of ascertaining whether the consumer is over-indebted and how his credit agreement debt can be restructured. The National Credit Act does however not provide detailed procedural rules for the conduct of the debt review process. It creates rights for the credit provider to terminate such a process and also protects the consumer by allowing for the resumption of a debt review that was not justly terminated. This lack of procedural guidance by the National Credit Act is problematic and may compromise the rights of both consumers and credit providers. This dissertation aims to identify selected procedural problems that manifest themselves in the context of termination and resumption of debt review. These problems are discussed and certain conclusions are drawn and recommendations for future reform of these problematic aspects are made in the hope that it would contribute to enhance the effectiveness of the debt review procedure.