The National Credit Act (hereinafter the Act) introduced debt review to the Republic of South Africa in 2007. Debt review was introduced to provide debt relief to over-indebted consumers. The legislature was not able to foresee and address several implementation obstacles and accordingly courts are forced to assist in the interpretation of the Act. Courts have created some legal certainty, but there are different opinions on the correctness of these interpretational principles. This study will consider current precedents and whether the current precedents are in accordance with the intention of the legislature. Section 2 of the Act stipulates that Act should be interpreted to give effect to the purposes of the Act. The purpose of the Act is contained in section 3. One of the purposes of the Act is to promote equality between the rights of consumers and credit providers in credit agreements. This dissertation illustrates that the Act aims to achieve this equality of rights in the debt review process by the inclusion of countervailing rights in part D of chapter 4 of the Act. The legislature considered recommendations made by certain role players in the debt review process. Proposed amendments were published on 29 May 2013 in the Government Gazette for public consideration. These proposed amendments were considered in the scope of this study. The dissertation concludes that the proposed amendments need to be supplemented in order to ensure that debt review becomes and remains an effective debt relief measure for over-indebted consumers, without prejudice to the rights of credit providers. / Dissertation (LLM)--University of Pretoria, 2014. / Mercantile Law / unrestricted

In South African insolvency law, in as much as debt relief measures are contained in three pieces of legislation, a discharge from debt is only available to an insolvent debtor whose estate has been sequestrated and he is eventually rehabilitated. The history of South African insolvency law indicates a developmental change from a ‘harsh creditor-orientated’ approach to a ‘debtor-friendly’ approach. However, the advantage for creditors’ requirement is now firmly embedded in the Insolvency Act 24 of 1936. This requirement is not defined in the Insolvency Act but has been largely interpreted by the courts and stringently applied. It is only once the applicant for the sequestration order has extinguished the burden of proving this requirement, amongst others, will the court exercise its judicial discretion to grant or refuse the order. Consequently, this requirement creates a stumbling block for debtors wishing to use the sequestration process as a debt relief measure and force discharge of their debts on their creditors. The sequestration process is aimed at the advantage of creditors and not the relief of debtors. Overburdened debtors seeking debt relief who cannot prove advantage of creditors are therefore not considered in sequestration applications. However, although debt relief is not a primary object of the Insolvency Act, it is an indirect consequence of the sequestration process when the insolvent debtor is rehabilitated. The Insolvency Act almost deals with every aspect of the different classes of creditors while there is no provision of the different classes of debtors who can and those who cannot prove an advantage to creditors. This serves as an indication that there is an imbalance between creditors’ and debtors’ interests. The study seeks to analyse the effect of the advantage requirement on sequestration applications from a debtor’s perspective. The alternative debt relief measures available to debtors when pursued by their creditors as contained in the Magistrates` Court Act 32 of 1944 and the National Credit Act 34 of 2005 are examined. It is submitted that South Africa does not provide the required sufficient debt relief because the administration orders and debt review in addition to other deficiencies, do not provide debtors with a statutory discharge from debts. The South African Law Reform Commission in the 2000 Insolvency Bill has recommended that the advantage for creditors’ requirement be retained in the new Insolvency Act. In a comparative survey, various legal systems are considered to investigate how the issue of finding a balance between debtors’ and creditors’ interests in insolvency law is dealt with. To accommodate all debtors, it is then submitted that the advantage requirement should not be retained in the Insolvency Act. / Dissertation (LLM)--University of Pretoria, 2012. / Mercantile Law / unrestricted

The National Credit Act 34 of 2005 and its Regulations came into full effect on 1 June 2007. In order to protect consumers by addressing over-indebtedness, the Act introduces a novel process of debt review in which a new agent, the debt counsellor, plays an important role to help relieve a consumer’s over-indebtedness. However, after the Act commenced, problems soon came to pass with regard to the debt review process. This was mainly due to loopholes and shortcomings in the National Credit Act and its Regulations. The key problems in debt review practice which are identified and analysed in this dissertation, are as follows: <ul>a) The interpretation of “the steps contemplated in section 129” in section 86(2). b) The application for debt review (Form 16 in the Schedule of the Regulations). c) The procedure to be followed when approaching the court. d) The format and contents of the “proposal” mentioned in sections 86 and 87. e) The omission of section 86(7)(c) in section 87. f) The non-provision for consent orders in terms of sections 86(7)(a) and 86(7)(c). e) The non-regulation of payment distribution agencies. f) The termination of debt review by the debt counsellor or a consumer. g) The qualifications, training and expertise of debt counsellors.</ul> Consequently measures taken by the industry or suggested by scholars to solve these problems are evaluated, for example the work stream agreement, the publication of two sets of new draft regulations, the request for a declaratory order in the High Court, a research commission to the UP Law Clinic and numerous conferences. Somewhat oversimplified, it can be said that most of the measures taken to solve the problems moved in the wrong direction, that is away from a simple, easy, quick, cheap and consumer-friendly process. At the moment the debt review procedures are very complex, extended, expensive and even consumer-hostile. In conclusion additional measures are proposed to those that other sources already recommended. Effective implementation of these measures would hopefully improve the practice of debt review in the Republic of South Africa, although it can realistically be assumed that there will always remain challenges in this regard. / Dissertation (LLM)--University of Pretoria, 2011. / Private Law / unrestricted