Real Estate Investor Magazine South Africa April 2015 | Page 25

Debt enforcement In seeking to ensure the NCA objectives are achieved, the Legislature has included provisions in the Act which provide that the credit provider may only seek to enforce its agreement where it has complied with a number of requirements. One such requirement is to send a written notice informing consumers that they are in default and inviting consumers to refer the matter to Debt Counsellors (DC), alternative Dispute Resolution Agents, Consumer Courts or Ombuds with the relevant jurisdiction. “One of the main objects of the NCA is to discourage reckless lending.” Debt review One of the mechanisms that Legislature has created to assist consumers who have become over-indebted is by allowing them to apply for debt review. This process, once initiated, places a moratorium on enforcement procedures and allows a Debt Counsellor to assess the debts and liabilities of consumers. If the DC is satisfied the consumer’s financial position can be improved to the point where they are no longer over-indebted, the DC will approach the credit providers with the aim of adjusting the terms of the agreement, either by extending its term or reducing the interest rate. In the event the credit providers do not agree to such a proposal, the DC will have to approach the relevant court for an order restructuring the agreements in accordance with a proposal. Whilst the objectives of the NCA are noble, they have not come without their consequences to consumers. The provisions of the NCA have to a large extent limited access to credit, either because the repayment obligations may place consumers in a financially precarious position, or because the credit provider’s risk of recovery, particularly on the terms agreed, has increased. RESOURCES Marlon Shevelew and Associates Inc. www.reimag.co.za .COM Neale Petersen Your Exclusive Access to Mentorship! “Formal education will make you a living; self-education will make you a fortune” Jim Rohn For more info contact 0861 ACT NOW! www.nealepetersen.com April 2015 SA Real Estate Investor 23