Ferris v Firstrand Bank Ltd 2014 3 SA 39 (CC) : enforcement of a credit agreement after breach of a debt rearrangement order and the ineffectiveness of debt review in terms of the National Credit Act

Abstract

The decision of the Constitutional Court in Ferris v Firstrand Bank Ltd (2014 3 SA 39 (CC); (Ferris)) deals with the right of a credit provider to enforce a credit agreement in terms of the National Credit Act 24 of 2005 (NCA) pursuant to a debt rearrangement order which was breached by a consumer. The Constitutional Court held that the credit provider, in such an instance, was in terms of the provisions of the NCA, independently entitled to enforce the agreement without further notice. In Ferris, breach of the rearrangement order thus immediately exposed consumers to enforcement actions by their credit providers which would not only automatically terminate the rearrangement order, but also the debt relief afforded by such an order.