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The right to be issued with a clearance certificate and the cancellation of the debt review process

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(as extracted from Nicky Campbell’s Chapter 6, “The consumer’s rights and credit provider’s obligations”, in The Guide to the National Credit Act by JW Scholtz, Jannie Otto, E Van Zyl, Corlia Van Heerden, and Nicky Campbell) Section 21 of the National Credit Amendment Act amended section 71 of the principal Act to provide as follows:…

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The effect of Rougier v Nedbank on the cancellation of debt review

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The National Credit Act 34 of 2005 essentially gives a consumer the right to apply to a debt counsellor for debt review if he is of the opinion that he is over-indebted. This right is entrenched in section 86(1) and gives a consumer an opportunity for debt rearrangement. The aforesaid cannot be deprived or limited…

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Sequestration Basics: How Does Bankruptcy Work

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Individuals facing insurmountable debt have legal options to relieve their financial burden, with sequestration and bankruptcy among the most notable. Understanding these processes is essential for anyone considering them to solve financial distress. This article provides a basic overview of sequestration and bankruptcy, highlighting their key aspects and how they work. What is Sequestration?Sequestration is…

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Dereliction and Relegation of Debt Counsellor’s Duties may prove costly for Debt Counsellors

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In December 2016, three people were ordered to pay R180 000.00 in fines for failing to comply with debt counselling regulations. The fines were imposed by the National Consumer Tribunal (the “NCT”) after it was discovered that the guilty parties had been operating a debt counselling business, but had done so in contravention of compliance…

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Can a Garnishee Order or Emoluments Attachment Order be Set Aside?

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An emoluments attachment order, or “garnishee” may be amended or rescinded provided the person bringing the application shows a valid reason for doing so. However, this is limited to the existence or validity of the order or the correctness of the balance being claimed or that the debtor cannot afford the amount stipulated in the…

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Trapped in administration? Cancel it or write it off!

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An administration order is granted in terms of the Magistrates’ Court Act 32 of 1944 where the consumers debt is less than R50 000.00. An administrator is then appointed to collect a monthly amount that is distributed amongst the consumers’ creditors as detailed in the administration order. Administrators can add new creditors to the list…

Data-retention periods for credit bureau information

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Data-retention periods for credit bureau information The National Credit Act prescribes the maximum periods for which consumer credit information may be recorded on the consumer’s credit record. Regulation 17(1) of the National Credit Act sets the maximum periods for the retention of credit bureau information as follows: Categories of consumer credit information Description Maximum period…

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Beware! Upfront fees for credit repair are unlawful

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Credit repair in South Africa has become a formidable industry. Only ten years ago, one needed an attorney to improve one’s credit record. Today there are dozens of so-called credit repair agencies and most do not employ attorneys, and many do not have any legal qualifications. With the proliferation of credit repair agencies, there has…