To sequestrate or not to sequestrate in view of the National Credit Act 34 of 2005 : a tale of two judgments

The National Credit Act aims to promote responsibility in the credit market by encouraging responsible borrowing, the avoidance of over-indebtedness and the fulfilment of financial obligations by consumers, to discourage reckless credit granting by credit providers and to regulate aspects of contrac...

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Published in: Potchefstroom electronic law journal Vol. 13; no. 3; pp. 83 - 124
Main Authors: Boraine, A, Van Heerden, C
Format: Journal Article
Language: English
Afrikaans
Published: North-West University 01-01-2010
Subjects:
NCA
Online Access: Get full text
Summary: The National Credit Act aims to promote responsibility in the credit market by encouraging responsible borrowing, the avoidance of over-indebtedness and the fulfilment of financial obligations by consumers, to discourage reckless credit granting by credit providers and to regulate aspects of contractual default by consumers. It attempts to address over-indebtedness through the provision of debt relief, which is accessed by means of the mechanism of debt review. This mechanism is based on the principle of full satisfaction of the consumer's financial obligations, in that the consumer-debtor may, by way of debt review, eventually obtain a rescheduling of his/her credit agreement debt, either by voluntary rearrangement plan with all his/her credit providers or as ordered by a court. Such rescheduling by court entails rearrangement of the consumer-debtor's obligations by extending the period of the agreement and reducing the amount of each payment due accordingly, or postponing during a specified period the dates on which payments are due under the agreement, or a combination of both. Where the debt review process however reveals reckless credit, the consumer is also afforded various forms of debt relief depending on the type of reckless credit extended to him/her. It has already been pointed out in an earlier publication that the aim of the NCA is thus not to deal with those instances where a debtor is insolvent and/or here he/she also has debts that do not qualify as credit agreements in terms of the NCA.
ISSN: 1727-3781
1727-3781