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.

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April 2015 SA Real Estate Investor

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