The National Credit Act No 34 of 2005, as amended, (hereinafter referred to as “the Act”) makes provision for debt review. Debt review is a debt rehabilitation program in which the restructuring of a consumer’s debt is made and implemented as a repayment plan. This is mainly to effect one payment a month to all the debtor’s creditors. It is, in most instances, seen as a preventative measure for administration orders.
The Act also contains strict regulations to which debt counsellors should adhere to. Section 44 to 49 of the Act further contains the application process to become a registered debt counsellor.
An application for debt review is regulated in terms of Section 86 of the Act.
Section 86 (1) and (2) reads as follows:
- A consumer may apply to a debt counsellor in the prescribed manner and form to have the consumer declared over-indebted.
- An application of this Section may not be made in respect of, and does not apply to, a particular credit agreement if, at the time of that application, the credit provider under that credit agreement proceeded to take the steps contemplated in Section to enforce that agreement.
The Act further prescribes an application fee in Section 3 which the debtor is to pay to the counsellor.
To terminate a formal debt review order, the Court must be approached for the order to be rescinded. If no formal court order for debt review has been made. the Court is to make an order that the consumer is no longer over-indebted.